SEC Says Its X Account Was ‘Compromised’ After Hacker Posts False Approval of Bitcoin ETFs

A flag outside the U.S. Securities and Exchange Commission headquarters in Washington, D.C., on Feb. 23, 2022. Al Drago/Bloomberg via Getty Images

A social media account belonging to the U.S. Securities and Exchange Commission (SEC) was “compromised” this week, the agency has said, after it appeared to approve exchange-traded funds (ETFs) holding Bitcoin.

The agency said its official account on Elon Musk’s X platform, formerly known as Twitter, was breached on Jan. 9 and that it had not approved Bitcoin ETF applications, contrary to a previous post stating that it had.

“The @SECGov X account was compromised, and an unauthorized post was posted,” the agency wrote. “The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.”

SEC Chairman Gary Gensler also shared a similar post on X confirming the agency’s account had been hacked.

In a separate statement shared with The Epoch Times, an SEC spokesperson said an unknown party had taken control of the agency’s social media account for a brief period.

“The SEC will work with law enforcement and our partners across government to investigate the matter and determine appropriate next steps relating to both the unauthorized access and any related misconduct,” the spokesperson added.

False Post Online for About 30 Minutes

The initial post was shared to the SEC’s X account—which is branded with a silver check mark, meaning that it had been verified as a government agency account—at around 4:11 p.m. EST on Jan. 9.

It featured an image of Mr. Gensler alongside the message: “Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges. The approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure continued investor protection.”

The false post was online for roughly 30 minutes before it was deleted and replaced with the SEC’s statement clarifying the account had been hacked.

The account also shared a second post that just said “$BTC,” but that post was deleted almost immediately, according to reports.

However, the posts reportedly prompted a brief price increase in Bitcoin.

2-Factor Authentification Was Not Enabled, Says X

Late on Jan. 9, X’s Safety team said it had completed a “preliminary investigation” into the SEC’s false post on the platform and found that 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.”

The social media giant also said SEC’s X account did not have two-factor authentication enabled at the time it was compromised.

“We encourage all users to enable this extra layer of security,” X’s Safety team said.

The incident comes as the SEC is widely expected to announce the approval of several first-ever Bitcoin ETF applications on Jan. 10, despite its previous opposition and legal action against multiple major cryptocurrency exchanges amid concerns the products would be vulnerable to market manipulation.

According to the Commodity Futures Trading Commission, a Bitcoin ETF is publicly traded but tracks the performance and price movements of Bitcoin futures contracts.

More than a dozen asset managers and financial institutions, including BlackRock, Fidelity, and Invesco, have applied with the agency to create such a fund, according to reports. 

However, a spokesperson for the SEC told CoinDesk last week that any approval for bitcoin ETFs would appear in the agency’s EDGAR database.

‘Congress Needs Answers’

Commenting on Jan. 9’s alleged SEC account breach, Sen. Bill Hagerty (R-Tenn.), who is a member of the Senate Banking Committee, which oversees the SEC and other financial regulators, called the incident “unacceptable.”

“Just like the SEC would demand accountability from a public company if they made such a colossal market-moving mistake, Congress needs answers on what just happened,” Mr. Hagerty said in a post on X.

The Epoch Times has contacted a spokesperson for the SEC for further comment.

Reuters contributed to this report.