SEC says X account was hacked as false post causes bitcoin price swings

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The Securities and Exchange Commission’s X account was hacked yesterday and briefly displayed a post falsely announcing the approval of bitcoin exchange-traded funds (ETFs), causing an abrupt swing in bitcoin’s price.

“The @SECGov X account was compromised, and an unauthorized post was posted,” the SEC said after the hack. “The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.” SEC Chair Gary Gensler also confirmed the hack and said the commission had not approved bitcoin ETFs.

While the incident highlighted ongoing concerns about the security of government or organizational accounts on X, the social network formerly named Twitter said in a post on its safety account that there was no breach of its systems.

“Based on our investigation, 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 @SECGov account through a third party. We can also confirm that the account did not have two-factor authentication enabled at the time the account was compromised. We encourage all users to enable this extra layer of security,” X said.

We contacted the SEC and will update this article if it provides more detail on the hack and whether it plans to use two-factor authentication going forward. The SEC told other media outlets that it “will work with law enforcement and our partners across government to investigate the matter and determine appropriate next steps relating to both the unauthorized access and any related misconduct.”

Despite false post, SEC approval expected soon

Despite yesterday’s post being false, the SEC is expected to approve bitcoin ETFs soon. As Reuters wrote, “The posting came as the SEC was widely expected on Wednesday to finally approve a batch of ETFs that track the price of bitcoin, in a potential watershed moment for the crypto industry. The unauthorized post surprised the industry, with insiders scrambling to find out whether it was true and why the SEC would first publish something on social media.”

The now-deleted X post from @SECGov said, “Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges. The approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure continued investor protection.” The post had an attached image with a quote from Gensler saying, “Today’s approval enhances market transparency and provides investors with efficient access to digital asset investments within a regulated framework.”

The post was followed quickly by a surge in bitcoin price, and then a drop after the SEC confirmed that the ETF approval had not happened. As CoinDesk wrote, “BTC first rallied 2.5 percent to a fresh 19-month high of $47,900… with crypto observers prematurely celebrating the landmark decision. Then, bitcoin sharply declined nearly 6 percent to as low as $45,100 when it turned out the SEC’s account was compromised and SEC Chair Gary Gensler denied the news.”

Bitcoin’s price has doubled in the past year. The Wall Street Journal says the rise over the past year was partly fueled by “the expectation that approval would fuel further purchases of digital currencies.” The expected approval of bitcoin ETFs would give ordinary investors more options for buying the cryptocurrency.

“For now, everyday investors who want to buy and sell digital currencies using traditional brokerages must use futures-based bitcoin ETFs, which use derivatives contracts to provide exposure to bitcoin price moves, or products traded in the lightly regulated over-the-counter market,” the WSJ wrote.

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