SEC Social Media Account Briefly Compromised, Fake Announcement Raises Concerns About Bitcoin ETF Approval

SEC Social Media Account: Fake Announcement Raises Concerns About Bitcoin ETF Approval | CIO Women Magazine

Source – The Economic Times

In an unexpected turn of events, the United States Securities and Exchange Commission (SEC) faced a security breach on its X social media account. On Tuesday, an unknown individual gained unauthorized access to the SEC Social Media Account, formerly known as Twitter, and posted a false message claiming the approval of exchange-traded funds (ETFs) for Bitcoin. The crypto industry, eagerly anticipating such a move, was caught off guard by the announcement.

The SEC promptly responded, clarifying that it had not approved spot bitcoin ETFs and the unauthorized access to the SEC Social Media Account had been terminated shortly after 4 p.m. Eastern time (2100 GMT). The regulatory body announced its collaboration with law enforcement to investigate the hack and any related misconduct.

X’s Confirmation and Security Lapses

Following the incident, X, the social media platform owned by Elon Musk, confirmed on Tuesday night that the SEC’s account had indeed been compromised. The breach was attributed to an “unidentified individual” who gained control over a phone number associated with the SEC Social Media Account through a third party. X revealed that the SEC did not have two-factor authentication enabled at the time of the breach. However, a preliminary investigation by X ruled out any system breach on its part.

The unauthorized post falsely claimed that the SEC had granted approval for bitcoin ETFs on all registered national securities exchanges. It included a fabricated quote attributed to SEC Chair Gary Gensler. The post had a notable impact on the price of bitcoin, leading to a surge after being reported by various news outlets, including Reuters.

Industry Reaction and Concerns

The unauthorized announcement surfaced at a critical moment when the SEC was widely expected to make a historic decision regarding the approval of ETFs tracking the price of bitcoin. Industry insiders, including executives from ETF issuers, were startled and puzzled by the tweet. Speaking anonymously due to the sensitive nature of the matter, executives expressed concerns about potential delays or withholdings in the approval process for spot bitcoin ETFs.

Despite the confusion caused by the security breach, legal experts like Anthony Tu-Sekine, who heads the blockchain and cryptocurrency group at the firm of Seward & Kissel in Washington, remained optimistic. Tu-Sekine suggested that the incident was unlikely to alter the expected approval outcome at this late stage. The motive behind the false announcement remained unclear, leaving industry participants and observers puzzled about the intentions behind the unauthorized post.



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