The U.S. Securities and Exchange Commission's (SEC) official Twitter account was hacked on Wednesday, leading to a fake announcement that the agency had approved a Bitcoin exchange-traded fund (ETF).
The false tweet sent Bitcoin prices surging briefly before plunging when the SEC confirmed the account had been compromised. The incident has raised serious concerns over security and misinformation spreading on social media.
A tweet from the verified @SECGov account [now deleted] stated that the SEC had approved Bitcoin ETFs. This led to a sudden spike in Bitcoin prices within a minute but for a short time as the news of the X account compromise circulated.
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| Reddit: u/ThreePartsAtLeast |
However, SEC Chairman Gary Gensler soon tweeted that the SEC's account had been compromised and that the agency had not approved any Bitcoin ETFs.
Following this, Bitcoin prices crashed back down to around $20,000, essentially wiping out the gains prompted by the fake announcement.
X also confirmed that at the time the account was compromised, the SEC account did not have two-factor authentication enabled.
We can confirm that the account @SECGov was compromised and we have completed a preliminary investigation. Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number…
— Safety (@Safety) January 10, 2024
"Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number associated with the @SECGov account through a third party." - X wrote in a tweet.
X encourages all users to enable two-factor authentication for an extra layer of security.
The hacking was due to an unidentified individual obtaining control over a phone number associated with the SEC account through a third party, the Safety Team explained. The agency said in a statement that it would collaborate with law enforcement agencies to investigate the hack.
The price swings caused by the fake information cost crypto traders millions of dollars and underscored concerns about social media being used to spread misinformation and manipulate markets.
The Aftermath: Demands for Strict Security Measures
The incident has raised alarms over the security practices being followed by the SEC, the topmost financial regulator in the country. Allowing unauthorized individuals access to its official social media accounts makes the possibility of market manipulation much easier.
There are growing demands for a thorough probe into the security lapses and stricter measures by the SEC to avoid such incidents in the future. The SEC handles highly sensitive financial and market information daily, and even a small leak could have massive repercussions, as seen in this case.
Cybercrooks continuously target X platform accounts (mainly officials or popular accounts), as numerous verified organizations have been hacked to spread cryptocurrency scams and links to wallet drainers.
Several high-profile company Twitter accounts have recently been compromised to promote cryptocurrency giveaway scams, resulting in users losing funds.
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| Twitter/ @SecuriTears |
On Monday, the official Twitter accounts of networking company Netgear and auto manufacturer Hyundai MEA were also hacked to promote fake cryptocurrency websites designed to steal from visitors' crypto wallets.