The US SEC account on X was hacked and spread fake news that crashed crypto market

The importance of security of the channels for digital communication from the government was proven again in the case of the X account hack yesterday. The official US Securities and Exchange Commission account on the X social network posted a message yesterday announcing that the government agency approved the first-ever bitcoin exchange-traded fund (ETF).
 

This text, alongside the statement of the US SEC chair Gary Gensler, was posted on the official channel for a few minutes and then deleted. In reaction to this event, Gary Gensler’s X account posted a message claiming that the official SEC account was hacked and that the SEC had not approved the bitcoin ETF.

Anyhow, this unfortunate mistake took a high financial toll. The US SEC has been under the spotlight recently for the decision around the first-ever bitcoin exchange-traded fund in the US. This decision has long been awaited in the markets, as ETFs are a form of financial product that can be traded on stock exchanges, attracting much attention from the finance and trading industry. The industry believes that ETFs will open the door to massive investments in the cryptocurrency markets. Bitcoin ETF would allow the most prominent investment companies to allocate some of their funds to buy and store cryptocurrency. 

The fake message posted yesterday on X launched the bitcoin price in minutes. A message sent by the SEC chair about the account hack crashed the whole market back in a swift reaction. It is estimated by experts that investors’ losses were enormous in this wild price volatility.

The X company security team announced in the report immediately after the accident that the SEC account was compromised. They clarified this was not due to X’s vulnerability but rather through controlling the phone number associated with the account. The X’s security team pointed out that the SEC account did not enable two-factor authentication.

This account hack is particularly interesting, considering that the SEC was suing X’s CEO Elon Musk earlier for market manipulation through the messages posted on the social media website. 

Some US Senators sitting on the Senate Banking Committee reflected on the news, demanding clarity around the government agency’s social media account hack.