US agency says account was hacked after ‘unauthorised’ post backs bitcoin
10 January 2024, 10:24
The price of bitcoin briefly spiked more than 1,000 US dollars after the post on X.
The Securities and Exchange Commission said that a post sent from the US agency’s account on the social platform X announcing the approval of a long-awaited bitcoin exchange-traded fund was “unauthorised”, and that the agency’s account was hacked.
The price of bitcoin briefly spiked more than 1,000 US dollars after the post on X, formerly known as Twitter, claimed “The SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges.”
Cryptocurrency investors had already driven bitcoin’s price above 46,000 US dollars in anticipation of the approval.
An ETF would provide a way to invest in bitcoin without having to buy the cryptocurrency outright on a crypto exchange such as Binance or Coinbase.
But soon after the initial post appeared, SEC chairman Gary Gensler said on his personal account that the SEC’s account was compromised and, “The SEC has not approved the listing and trading of spot bitcoin exchange-traded products”.
Mr Gensler called the post unauthorised without providing further explanation.
“Welp,” wrote Cory Klippsten, chief executive of Swan Bitcoin, on X.
Like many bitcoin investors, Mr Klippsten had been expecting the agency to approve bitcoin ETFs potentially as soon as this week.
The price of bitcoin swung from about 46,730 US dollars to just below 48,000 US dollars after the unauthorised post hit, and then dropped to around 45,200 US dollars after the SEC’s denial.
It was trading around 46,150 US dollars at 6:15pm ET.
Shortly after Mr Gensler’s statement, it appeared that the SEC had got back control over the account.
It was unclear exactly how the SEC’s social media account was hacked.
X’s @Safety account tweeted on Tuesday night that a preliminary investigation by the platform determined “an unidentified individual” got control of a phone number associated with the account “through a third party”.
It did not elaborate, though it did say that the compromised SEC account, @SecGov, did not have two-factor authentication activated.
Even before that news, politicians who have long expressed frustration at how Mr Gensler operates the SEC, Republicans in particular, expressed anger at what they suggested were lax SEC security controls over its accounts.
“Just like the SEC would demand accountability from a public company if they made a colossal market-moving mistake, Congress needs answers on what just happened,” said Republican Senator Bill Hagerty of Tennessee, who sits on the Senate Banking Committee.
This is not the first time there has been false market-moving information about the future of bitcoin on regulated exchanges.
A false report back in October implied that fund manager BlackRock had gotten approval for bitcoin ETF, causing bitcoin prices to jump sharply.
Elon Musk gutted Twitter’s content moderation and security teams after taking over the platform in late 2022.
And while internet watchdog groups have complained about a spike in toxic content, including antisemitic and other hate speech on X, many also worry about account integrity.
“The consequences of account takeovers could potentially be significant, and especially during an election year,” said Brett Callow, an analyst with the cybersecurity firm Emsisoft.
A spokesperson for X did not immediately respond to a request for comment.
