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Hackers Hijack SEC X Account to Announce Phony ETF Approval

Hackers took over the SEC’s X account to falsely trumpet the agency’s bitcoin ETF approval.

The breach happened Tuesday (Jan. 9), allowing whoever took over the account to erroneously say the Securities and Exchange Commission (SEC) had given its long-awaited blessing to a bitcoin exchange-traded fund (ETF).

The regulator and Chairman Gary Gensler both took to X — formerly Twitter — Tuesday evening to disavow the announcement.

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

The X “Safety” account also confirmed the hack and said the social media platform had conducted its own 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 associated with the @SECGov account through a third party,” they said. “We can also confirm that the account did not have two-factor authentication enabled at the time the account was compromised.”

A spokesperson for the SEC told the Wall Street Journal (WSJ) that the account was taken over briefly sometime after 4 p.m. The agency will work with law enforcement on the issue and take “next steps relating to both the unauthorized access and any related misconduct,” they added.

The WSJ report notes that concerns about market manipulation and other types of crypto-related misconduct have helped hold back the SEC’s approval of bitcoin ETFs.

“I think this is one of the most egregious and probably criminal attempts at market manipulation that has been seen in a very, very long time,” said Dennis Kelleher, president of Better Markets, a group that campaigns for stronger financial regulations. “There’s a real potential for somebody to have made a very, very large amount of illegal profits.”

Wednesday (Jan. 10) is the SEC’s deadline to approve a bitcoin ETF. As PYMNTS wrote last week, the investment world “seems to be holding its collective breath” waiting for the approval.

Already, anticipation of a possible bitcoin ETF helped drive up the price of bitcoin to its highest level since 2022.

That report also called into question the notion that an SEC-approved bitcoin ETF will make cryptocurrencies more popular.

For example, PYMNTS Intelligence report “The U.S. Crypto Consumer: Cryptocurrency Use in Online and in-Store Purchases” showed that bitcoin remains the go-to name for many crypto enthusiasts, as it is used by nearly 80% of consumers who hold digital currencies.

“But only 16% of overall consumers have owned cryptos. Of that 42-million-person pool, 16.1 million used crypto to transact, which implies that 6% of the population (overall) has desired to use crypto to buy things and acted on that desire,” that report said.