On Friday, the Securities and Exchange Commission (SEC) disclosed that a social media post on X falsely stating that the agency had approved spot bitcoin exchange-traded funds (ETFs) was created by an “unauthorized party.” This party had gained control over the phone number connected to the SEC’s account on the platform. The incident, which occurred on Tuesday, raised concerns about cybersecurity at both the agency and the social media platform, formerly known as Twitter.
The SEC stated that it is working with law enforcement, including the FBI and the Department of Homeland Security, to address the breach. They also mentioned that they are assessing the impacts of the incident on the agency, investors, and the marketplace. The agency acknowledged that the unauthorized access to their social media account has raised concerns about the security of their online presence.
The confusion began on Tuesday afternoon when a hacked post appeared on the SEC’s X account, announcing the approval of Bitcoin ETFs for listing on registered national securities exchanges. The post also mentioned that the approved ETFs would be subject to ongoing surveillance and compliance measures to protect investors. A second post, simply stating “$BTC,” appeared two minutes later and was soon deleted. However, the unauthorized user also liked two other posts by non-SEC accounts. This caused a sharp rise in the price of bitcoin before it later pulled back.
In response to the hack, the SEC’s staff posted on the official X account of SEC Chair Gary Gensler, announcing that the agency’s main account had been compromised. They also clarified that they had not approved any spot bitcoin exchange-traded products yet. The staff then deleted the unauthorized post, unliked the liked posts, and used the official SEC account to make a new post explaining the situation.
The SEC confirmed that they had reached out to X for assistance on Tuesday and believe that the unauthorized access to their account was terminated later that day. They also stated that, so far, there is no evidence that the unauthorized party gained access to any SEC systems, data, devices, or other social media accounts.
On the following day, the SEC officially announced the approval of the listing and trading of spot bitcoin ETFs. This was a significant breakthrough for the crypto industry, which has been trying to attract more traditional investors to the digital asset space for years.
As of Friday evening, Bitcoin was down 7.6% over a 24-hour period. The SEC’s announcement of the ETF approval may have contributed to this decline. The agency’s statement on Friday did not mention any further details about the incident or any potential remedial measures they may take. However, they emphasized that they will continue to assess the situation and take necessary actions to ensure the security of their online presence.