HFS Chair McHenry Demands SEC Explanation for Compromised Tweet on Bitcoin ETFs

House Financial Services Committee ("HFS") Chair Patrick McHenry (R-NC) demanded that the SEC explain the breach of its X (Twitter) account that resulted in a false post stating that Bitcoin ETFs were approved to be listed on all registered national securities exchanges.

In the letter, co-signed by Bill Huizenga (R-MI), Chair of the Subcommittee on Oversight and Investigations, French Hill (R-AR), Chair of the Subcommittee on Digital Assets, and Ann Wagner (R-MO), Chair of the Subcommittee on Capital Markets, Representative McHenry stated that the false tweet led to an increase in the value of Bitcoin of approximately $48,000 before the SEC announced that its account was "compromised."

The Representatives were critical of the SEC, saying that an X investigation revealed that the error occurred due to lack of two-factor authentication and use of an unapproved phone number allowing access to the account. The legislators stated that "[t]his failure is unacceptable, and it is disturbing that your agency could not even meet the standard you require of private industry." The Representatives demanded that the SEC be held accountable to the "same requirements that are imposed on companies throughout the country," noting the cybersecurity rule adopted by the SEC in 2023 that requires companies to "disclose within four business days if a 'material' cybersecurity incident occurs" and that the disclosure must include "a description of the nature, scope, and timing of the incident." The representatives requested a response from the SEC with explanations for the security breach incident by January 17, 2024.