SEC Twitter Hack: Lawmakers Demand Answers After Fake Bitcoin ETF Notice

Table of Contents

• What Happened?
• Lawmaker Reaction
• Impact and Analysis

The official Twitter account of the U.S. Securities and Exchange Commission (SEC), @SECGov, was compromised on December 19, 2021. The hackers posted a fake announcement claiming that the SEC had approved a spot Bitcoin ETF, sending the price of BTC up by over 10% before it was taken down.

What Happened?

A preliminary investigation found that the compromise resulted from an unauthorized individual gaining control over a phone number linked to the SEC’s Twitter account, rather than a breach of the SEC’s internal systems. At the time of the breach, the SEC account did not have two-factor authentication (2FA) enabled.

The fake tweet that was posted read “The US Securities and Exchange Commission just approved the first US Bitcoin spot ETF“. The post was quickly deleted, but not before it spread across social media and financial news outlets, causing confusion in the market.

Lawmaker Reaction

Several US lawmakers expressed concerns about the incident, calling it potential market manipulation. Senator Bill Hagerty labeled the situation “unacceptable” and demanded accountability from the SEC.

Senator Cynthia Lummis called for transparency from the SEC around the events leading up to the false post. Fox Business analyst Charles Gasparino suggested that the SEC might need to investigate itself for potential market manipulation.

Impact and Analysis

While the SEC Twitter hack caused brief market confusion, analysts believe it will not delay the expected approval of a spot Bitcoin ETF, which is still scheduled for later this week. However, the incident has drawn criticism of the SEC’s ability to protect investors, as they failed to properly secure their own social media account.

Some have speculated that the compromised post could have resulted from an accidental “fat-finger” error by SEC staff. Going forward, lawmakers and market participants will be looking for answers from the SEC on how the breach occurred and what steps they are taking to prevent a similar incident in the future.

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