SEC X Account Breach Sparks Bitcoin Turmoil; Two-Factor Authentication Absent
A recent cyber security breach that compromised the U.S. Securities and Exchange Commission’s (SEC) X account triggered turbulence in the price of Bitcoin.
The U.S. SEC’s official X account falsely announced approval for listing a spot bitcoin exchange-traded fund (ETF), igniting brief euphoria. However, the tweet emerged as a fake announcement once officials declared the social media account was hacked.
Key Details:
- An unauthorized tweet from the SEC account claimed ETF approval.
- Bitcoin spiked nearly 3% before plunging on the hack revelation.
- The account lacked basic two-factor authentication protection.
- Lawmakers and lawyers demand accountability for market disruption.
Specifically, the sham tweet shared heralded the supposed green-lighting of spot Bitcoin ETFs. Bitcoin catapulted to 19-month peaks, rallying almost 3% intraday above $47,800 before the fake post was exposed.
Prices then spiraled downward as SEC Chairman Gary Gensler tweeted about the fake news from the SEC’s compromised X account.
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X Highlights Security Shortfalls in SEC Account
X Safety account later determined the breach resulted from an unnamed party seizing control of a phone number linked to the SEC account without directly infiltrating X systems. Nonetheless, the platform confirmed the agency’s feed lacked basic two-factor authentication safeguards before hackers capitalized on vulnerabilities.
Gensler himself previously urged crypto investors toward stringent security regimes, rendering the shortfall at his commission ironic. The potential for miscommunication poses a risk to the SEC’s credibility in making decisions on cryptocurrencies in the future.
“Just like the SEC would demand accountability from a public company if they made such a colossal market-moving mistake, Congress needs answers on what just happened. This is unacceptable.”
Senator Bill Hagerty
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Senator Bill Hagerty expressed increased criticism, leading to expectations of internal reviews regarding market manipulation. Additionally, securities lawyers noted that the abrupt reversal of ETF approvals may compromise the accuracy of projected SEC actions.
Most importantly, the notable incident indicates a lapse in cyber defenses among registrants and licensees, including those responsible for crafting related regulations. The SEC is now compelled to promptly begin the process of ramping up the security of their social media accounts.
