Wednesday, June 19, 2024
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Hacker Seized SEC Phone Number to Post Fake Bitcoin ETF Approval, X Says

The Securities and Exchange Commission (SEC) faced a security breach on its X (formerly Twitter) account, leading to the dissemination of false information regarding the approval of Bitcoin ETF applications. X’s Safety team revealed that the compromise was due to an individual gaining control over a phone number associated with the @SECGov account through a third party. The incident triggered market fluctuations and raises concerns about the SEC’s cybersecurity protocols.

  1. Security Breach Details:
    • The SEC’s X account was compromised when an unidentified individual took control of a phone number linked to the @SECGov account via a third-party source.
    • This form of compromise rules out an “inside job” or accidental posting theory, shedding light on external factors leading to the false announcement.
  2. Market Impact and Bitcoin Price Movement:
    • The false tweet about Bitcoin ETF approval led to a temporary surge in Bitcoin’s price, followed by a rapid decline after SEC Chair Gary Gensler clarified the misinformation.
  3. Questions About SEC Security Measures:
    • The incident raises concerns about the basic security measures employed by the SEC, given its role as a prominent investment regulator with significant influence over financial markets.
    • U.S. Senators J.D. Vance and Thom Tillis have demanded an explanation from the SEC regarding the cybersecurity lapse.
  4. Absence of Two-Factor Authentication:
    • X’s Safety team confirmed that the compromised account did not have two-factor authentication enabled at the time of the security breach.
    • Users, including regulatory bodies, are encouraged to activate two-factor authentication as an additional security layer.
  5. Senator’s Response:
    • Senators Vance and Tillis expressed their dissatisfaction with the SEC’s cybersecurity lapse, deeming it unacceptable for an agency overseeing global capital markets.
  6. Call for SEC Explanation:
    • The SEC has yet to provide a comment on the situation, and the explanation for the security breach is awaited.

Conclusion: The unauthorized access to the SEC’s official X account, resulting in the dissemination of false information, highlights the vulnerability of regulatory communication channels to external threats. The incident prompts a reevaluation of security protocols within regulatory bodies to ensure the integrity of official statements and prevent market manipulation.

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