SEC Chair Gary Gensler asked by senators to address X security breach

United States senators J.D. Vance and Thom Tillis sent a letter to Securities and Exchange Commission chair Gary Gensler requesting clarification on the security breach on the agency’s official X account on Tuesday, which the two described as “unacceptable.”

Around 4:11 p.m. ET, the SEC tweeted that it granted approval for spot bitcoin ETFs to be listed on registered U.S. securities exchanges. Approximately 15 minutes after the announcement, Gensler clarified that the SEC account had been compromised, and that the agency had not approved the ETF products.

“These developments raise serious concerns regarding the Commission’s internal cybersecurity procedures and are antithetical to the Commission’s tripart mission to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation,” the letter said.

In the letter, Vance and Tillis asked the SEC chairman to address six questions, many of which contain elements of ambiguity surrounding the incident that are sparking wide speculation on social media. The two senators requested Gensler to respond to the letter by a deadline of Jan. 23.

The letter includes a call for Gensler to explain whether the X post was made by an SEC insider, and if the security breach changes the agency’s planned schedule for making the final verdict on spot bitcoin ETFs. Another question also asked if the SEC intends to compensate the financial losses incurred from the error.

Amid the initial announcement and subsequent clarification, the price of bitcoin spiked to around $47,950 before plunging to $45,285. Its current price at publication time sits at $45,983.

Meanwhile, the SEC said it will work with law enforcement to conduct an investigation on the X hack, while the X's safety team said a preliminary investigation showed that an unidentified individual took control over the phone number associated with the agency’s account, which did not have a two-factor authentication.