US SEC Reports Hacking of X Account

The US Securities and Exchange Commission’s (SEC) X account was reportedly hacked, leading to the inadvertent approval of bitcoin exchange-traded funds (ETFs). This false announcement swiftly impacted financial markets, causing a surge in Bitcoin prices.

On Jan. 9, 2024, SEC’s X account was hacked, and misuse was reported as the perpetrators falsely approved bitcoin ETFs, an eagerly anticipated SEC announcement. Consequently, Bitcoin's price surged to over US$48,000 shortly after the fake post around 4:11 pm (ET), only to drop below US$45,000 minutes later, eventually stabilizing around US$45,513.

The SEC deleted the fake post after 30 minutes and confirmed the vulnerability of its X account. “The @SECGov X account was compromised, and an unauthorized post was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products,” the company stated on its X account. 

Later that day, X confirmed the intrusion into SEC’s account and reported a preliminary investigation took place. According to the company, SEC intrusion was not related to any breach of X’s systems. Instead, the company said an unidentified individual gained control over a phone number associated with the commission’s account through a third party. According to X report, SEC’s account did not have two-factor authentication process enabled at the time the intrusion was perpetrated. “We encourage all users to enable this extra layer of security,” the company said on X. 

The vulnerability of SEC’s account raised concerns regarding cybersecurity measures in US institutions. In an interview with CNBC, Dmitri Alperovitch, Executive Chairperson, Silverado Policy Accelerator said the attack was not a prank but it was a designed plan to make a profit from it. Alperovitch pointed out that Bitcoin's use of blockchain facilitates identifying potential culprits behind the attack. According to him, although blockchain provides a level of anonymity, every transaction is recorded. 

Despite the concerns raised by the intrusion, on Jan. 10, 2024, SEC greenlighted 11 bitcoin applications, including BlackRock’s, Ark Investments/21Shares’, Fidelity’s, Invesco’s, and VanEck's. The measure will allow investors to invest in digital assets more simply. However, SEC stressed the approval does not mean the institution backs investing in such assets. “While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto,” SEC stated in a press release.