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SEC Addresses Unauthorized Access to X Account and the Subsequent Faux Bitcoin ETF Approval Tweet

Police & Regulations
Jan 17, 2024 at 07:55 am

The U.S. Securities and Exchange Commission (SEC) reassured the public in a recent update that its systems remained secure despite a fraudulent bitcoin ETF approval tweet from its official Twitter account, @SECgov. The regulatory body clarified that there was no unauthorized access to its systems and devices by the perpetrator behind the misleading announcement.

The incident unfolded earlier this week when a tweet from @SECgov claimed the approval of several spot bitcoin exchange-traded fund (ETF) applications for trading. Subsequent investigations revealed the tweet to be a hoax, orchestrated through unauthorized access gained via the account's associated phone number. The SEC issued a detailed timeline of the events, noting that the first unauthorized post occurred at 4:11 p.m. ET (21:11 UTC), with SEC Chair Gary Gensler swiftly providing clarification 15 minutes later.

According to the SEC, its staff maintained control of the account throughout the episode, taking immediate actions such as deleting the false post, un-liking other bitcoin-related tweets, and updating the primary SECgov account within 30 minutes. Seeking assistance from X.com, SEC staff successfully terminated the unauthorized access between 4:40 p.m. ET and 5:30 p.m. ET.

In response to concerns, an SEC spokesperson confirmed the FBI's active investigation into the matter, clarifying that the fake announcement was not a premeditated release. Simultaneously, the Department of Homeland Security's Cybersecurity and Infrastructure Security Agency (CISA) is conducting its own inquiry.

Despite the breach, the SEC proceeded with the legitimate approval of nearly a dozen bitcoin ETF applications on the following Wednesday, leading to trading commencement a day later. Lawmakers expressed alarm over the incident, prompting calls for explanations and investigations. Senators Ron Wyden and Cynthia Lummis urged the SEC Inspector General's office to probe the hack and scrutinize potential lapses in cybersecurity measures.

Following Senators J.D. Vance (R-Ohio) and Thom Tillis (R-N.C.), another communication ensued where they requested Gary Gensler to update their teams on various aspects of the hack. This covered inquiries about the SEC's approach to bitcoin ETFs and outlined questions on how the SEC intends to address potential financial losses incurred by investors due to the misleading announcement. 

Read More: Gary Gensler's Perspective on Greenlighting Bitcoin ETFs

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