X (Formerly Twitter) Confirms SEC Account Compromised in Bitcoin ETF Debacle
X Confirms SEC Account Compromised
Social media platform X (formerly Twitter) revealed on Wednesday that the Securities and Exchange Commission’s account was compromised in a fake post incident involving the regulator’s approval of a spot bitcoin exchange-traded fund.
Investigation and Response
A preliminary investigation by X determined that a third party gained access to a phone number associated with the SEC, compromising the account. The investigation also revealed that the account did not have two-factor authentication enabled at the time of the breach.
False Announcement
The announcement came shortly after the SEC’s official X account posted about approving the listing of an ETF directly tracking the spot price of bitcoin. The fake post claimed that the SEC had granted approval for Bitcoin ETFs to be listed on all registered national securities exchanges.
Official Response
SEC Chair Gary Gensler promptly responded to the fake post, stating that the official SEC account was compromised and that the tweet was unauthorized.
Market Impact
The false post triggered a brief spike in bitcoin prices, with the cryptocurrency trading down 1.8% at $46,109.7 after the fake SEC announcement, which led to a temporary surge to nearly $48,000.
SEC’s Stance
The SEC has previously rejected attempts to list a spot bitcoin ETF, citing concerns about investor protection from cryptocurrency price manipulation.
Industry Speculation
Speculation about the approval of a spot-traded bitcoin ETF has led to significant market interest, with fund managers such as BlackRock Inc and Wisdomtree adjusting their ETF applications in anticipation of an SEC decision.
Market Impact and Industry Challenges
Despite the potential for increased institutional capital flowing into bitcoin with the approval of a spot ETF, the broader crypto industry is grappling with declining trading volumes and a loss of investor confidence following high-profile frauds and bankruptcies in recent years.
The cryptocurrency market, particularly bitcoin, is also experiencing reduced trading volumes compared to the highs seen during the 2021 bull run.
