The US Securities and Exchange Commission (SEC) faced a major security breach with the official Twitter account being compromised. A false announcement regarding the approval of Bitcoin Exchange Traded Funds (ETFs) was published, causing market volatility and sparking discussions about potential liabilities for the regulator.
Rebecca Fike: “Congress, Justice Department or CFTC Could Be Involved”
Rebecca Fike, a former SEC enforcement attorney and partner at Vinson & Elkins, weighed in on the incident during a televised discussion. Fike expressed concern about the breach, emphasizing that it was ironic that the agency responsible for market surveillance was the victim of such an incident.
Had this incident occurred at a publicly traded company, the SEC would undoubtedly have launched an investigation, contacted company representatives and reviewed the breach, Fike said. But in this case, things took a turn and questions arose about who was investigating the SEC.
According to the attorney, multiple agencies may be involved following this breach, including Congress, the Department of Justice (DOJ), and even the Commodity Futures Trading Commission (CFTC) due to Bitcoin's commodity status.
Fike emphasized the complexity of cybersecurity and the challenges of reacting quickly to such breaches, especially considering the massive market impact in a short period of time. The vulnerability led to the liquidation of approximately $90 million in long and short positions in Bitcoin.
*This is not investment advice.