This week, the US Securities and Exchange Commission‘s account on X (formerly Twitter) was compromised, posting an unauthorized message about ETF approval that caused Bitcoin prices to skyrocket before being revealed as false news.
Now, lawmakers and lawyers are demanding accountability; ETtech presents an overview of this ongoing drama.
X’s account compromise was not due to any breach of X’s systems?
On Tuesday afternoon, the cryptocurrency industry experienced an euphoria. After regulators approved bitcoin ETFs across national securities exchanges, an announcement from SEC’s official account on X, formerly Twitter was tweeted causing prices of bitcoin to spike as high as $48,000 before eventually falling back below that mark.
The SEC noted in a later statement that this post was unauthorised and not approved by them, adding they will cooperate with law enforcement to investigate. They also reiterated their stance against creating spot bitcoin ETFs which traders were expecting them to approve this week as part of long-standing efforts by them to develop such products.
Elon Musk-owned platform X released a late night statement explaining that its SEC account had been compromised by an unknown user who gained control over a phone number associated with the account through SIM swapping. According to its preliminary investigation, no two-factor authentication had been enabled at the time of compromise and therefore none other accounts on its system had been affected by it.
MarketWatch quoted a cybersecurity expert as noting the hack was a stark reminder of how vulnerable any high-profile Twitter account can be, with prominent figures often having their accounts hijacked to spread scams – this week Google-owned security firm Mandiant had their account taken over to promote crypto scams while Canadian senator’s accounts were also used to promote cryptocurrency schemes.
This incident marks a series of cybersecurity mishaps at X, purchased by Tesla CEO Elon Musk in 2018. Since that purchase, there have been concerns over its systems security – particularly after they fired hundreds of security employees and trimmed budget for such efforts. But according to Elon Musk and company, security improvements have been implemented, including hiring more people dedicated to keeping users safe from attacks.
X’s safety team’s statement
The US Securities and Exchange Commission (SEC) has confirmed its X account was compromised, leading to an unauthorized post implying it approved Bitcoin ETFs. This caused brief spikes in cryptocurrency prices before they quickly dropped back after realizing this news was false. To address the situation, law enforcement will work closely with SEC on this matter and two-factor authentication wasn’t enabled on its account X account.
On Jan. 10 on its safety page, X announced that its SEC account had been compromised after a mysterious individual gained control of an associated phone number – known as SIM swap hacking and used by attackers to gain entry without needing access codes or security codes.
X has announced it is encouraging all users to enable two-factor authentication (2FA), an effective and simple way of protecting accounts against the type of hack that affected the SEC account. Many members of Congress, including Democratic Senators JD Vance and Thom Tillis have called upon the SEC to increase its cybersecurity protocols.
The hacking incident has shaken the web3 community to its core and there have been speculations that SEC orchestrated it all for unknown motives. No matter its origins, this incident highlights the significance of two-factor authentication (2FA). Far too often people and organizations forget this key safeguard – including government agencies. SEC officials who have publicly advocated for more stringent crypto investor protections should take this as a wakeup call and ensure their own accounts are secure. Since being compromised, the SEC’s X account has since been secured. Unfortunately, many other large companies and individuals have reported being compromised as well, including numerous Twitter accounts belonging to large firms or individuals being compromised recently.
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