SEC's Bitcoin ETF debacle was result of employee not utilizing two-factor authentication: X safety
X’s corporate safety account has determined that a post from the Securities and Exchange Commission (SEC) concerning Bitcoin on Tuesday was not the result of a hacking attempt.
About 15 minutes after the SEC said on X that Chairman Gary Gensler approved of Bitcoin ETFs, Gensler himself said the post was false and its "account was compromised." Hours later, the X Safety account said a preliminary investigation found the account was not breached but was accessed "rather due to an unidentified individual obtaining control over a phone number associated with the [official SEC] account through a third party."
The post about Bitcoin was merely the result of an employee not having two-factor authentication on accessing the account, the Safety account said.
"We can also confirm that the account did not have two-factor authentication enabled at the time the account was compromised," the post read. "We encourage all users to enable this extra layer of security."
WILL SEC INVESTIGATE ITSELF AFTER GARY GENSLER DEALT EMBARRASSING BLOW IN BITCOIN ETF DEBACLE?
The Safety account then shared a link to encourage users to keep their own accounts secure, recommending they: Use two-factor authentication and strong passwords, require email and phone numbers to reset passwords, and to "be cautious of suspicious links and always make sure you’re on twitter.com before you enter your login information."
The initial post said the SEC approved of Bitcoin ETFs, which it continues to contemplate and which would allow financial exchanges to sell the ETFs. It caused the cryptocurrency to see a spike in its price from around $46,700 to nearly $48,000 after the posting.
SEC DUPED, X ACCOUNT HACKED, BITCOIN ETF NOT APPROVED
"Today the S.E.C. grants approval for Bitcoin E.T.F.s for listing on all registered national securities exchanges," the initial post said. "The approved Bitcoin E.T.F.s will be subject to ongoing surveillance and compliance measures to ensure continued investor protection."
It has since been deactivated and replaced with more details.
"The @SECGov X account was compromised, and an unauthorized post was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products" the post clarified.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The SEC initially told FOX Business that the SEC's @SECGov X/Twitter account "has been compromised. The unauthorized tweet regarding bitcoin ETFs was not made by the SEC or its staff."
The SEC spokesperson added: "The SEC has determined that there was unauthorized access to and activity on the @SECGov x.com account by an unknown party for a brief period of time shortly after 4 pm ET. That unauthorized access has been terminated. 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."
FOX Business’ Charlie Gasparino and Eleanor Terrett contributed to this report.