The primary responsibility of the Securities and Exchange Commission (SEC) is to protect investors, maintain fair markets and facilitate capital formation. SEC Chairman Gary Gensler failed to live up to that mission with the recent controversy surrounding the SEC’s Bitcoin exchange-traded fund (ETF) announcement. The botched rollout embarrassed Gensler and the commission but, most important, unveiled another government-created threat to market stability that requires a thorough, bipartisan congressional investigation.

On Jan. 9, a post on the SEC’s X account claimed the agency had approved the listing and trading of spot Bitcoin ETFs. The announcement, highly anticipated for months, resulted in an immediate 2.5 percent surge in the price of Bitcoin. It took the SEC 15 minutes to issue a second post asserting that the account had been “compromised” and that the Bitcoin ETFs were not approved, resulting in “a $40 billion swing in the combined value of bitcoin in circulation,” according to Wired.

An internal investigation by X found that “the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number associated with the SEC account through a third party.” Further, X revealed, “the account did not have two-factor authentication enabled at the time the account was compromised.”

This, even though Gensler had posted on X just months earlier urging Americans to set up multifactor authentication.

Taken at face value, the simple fact that a social media account with the power to move markets by billions, even trillions, failed to maintain basic cybersecurity protocols is astonishing. Given the demonstrated risk of severe market volatility and harm to everyday investors, Americans deserve a full accounting of what went wrong.

It is encouraging to see members of Congress taking swift action. In the House, Financial Services Committee Chairman Patrick McHenry (R-N.C.) led a letter to Gensler co-signed by subcommittee chairs Bill Huizenga (R-Mich.), French Hill (R-Ark.), and Ann Wagner (R-Mo.) demanding a full briefing on the incident.

On the other side of the Capitol, Senators J.D. Vance (R-Ohio) and Thom Tillis (R-N.C.) sent a letter to Gensler within hours of the incident, stating, “It is unacceptable that the agency entrusted with regulating the epicenter of the world’s capital markets would make such a colossal error,” and pressing the SEC chairman for answers. 

Another letter from Senate Finance Committee Chairman Ron Wyden (D-Ore.) and Banking Committee member Cynthia Lummis (R-Wyo.) urged the SEC’s internal watchdog to investigate, noting, “A hack resulting in the publication of material information for investors could have significant impacts on the stability of the financial system and trust in public markets, including potential market manipulation.” 

While all these efforts are a strong first step, the stakes are too high to stop there.

The House and Senate committees of jurisdiction must launch a full investigation. In doing so, they would hold Gensler to the same standard he set when the commission issued new cybersecurity disclosure rules for public companies. 

“Our markets depend on a basic bargain: Investors get to decide which risks to take so long as companies raising money from the public make full, fair and truthful disclosure.” These were Gensler’s words just six months ago when the new rules were adopted. He owes Congress and the American people the same “full, fair and truthful disclosure.”

We know egregious security issues at the SEC need to be addressed. There are also significant questions about how information is handled and what protocols are in place to ensure a level playing field and protect everyday investors. This incident is just the latest display of incompetence, coming on the heels of the SEC’s recent admission that it misled a federal judge.

Congressman Warren Davidson (R-Ohio) has introduced the SEC Stabilization Act to restructure the commission. The bill should be considered by Congress. With the future stability of our financial markets on the line, Gensler must answer for his failed leadership and be held accountable.