SEC Chair Gensler confronts security breach and deceptive Bitcoin ETF declaration on X
Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), has responded to inquiries from lawmakers regarding a security incident involving the SEC’s account on X. On January 9, an unauthorized individual executed a SIM swap attack on the SEC’s account on X and falsely announced that the SEC had sanctioned several spot Bitcoin ETFs. Despite the initial message being fake, the SEC did authorize those funds on January 10.
In light of the incident, Gensler promptly reassured lawmakers of the SEC’s dedication to cybersecurity. In a letter to House members Patrick McHenry, Bill Huizenga, French Hill, and Ann Wagner, Gensler emphasized the SEC’s commitment to stringent cybersecurity measures. He stated, “I assure you that the SEC takes its cybersecurity obligations seriously,” and highlighted a briefing scheduled for January 17 to address the incident and respond to inquiries from the lawmakers.
This group of House members had previously expressed concerns, urging the SEC to adhere to the same security disclosure standards it expects from regulated companies. They requested a detailed explanation by January 17, a deadline that the SEC met through the aforementioned briefing.
Senators Ron Wyden and Cynthia Lummis also engaged with the SEC, calling for an investigation into enhanced security measures such as multi-factor authentication and the implementation of phishing-resistant hardware tokens. However, an update on these requests, expected by February 12, was not included in Gensler’s latest correspondence.
Gensler’s letter, which was not initially made public, came to light following a report by Politico on February 8. The report detailed the ongoing investigation into the SIM swap attack, including efforts to determine how the attacker gained access to the phone number linked to the SEC’s X account and bypassed security measures.
Critics pointed out that the SEC’s X account did not have two-factor authentication at the time of the breach, a security feature that has since been enabled across all SEC social media platforms. The SEC is currently investigating the extent of the breach and has found no evidence of further unauthorized access to its systems or data.
