The Securities and Exchange Commission said Wednesday the FBI is investigating the hack of the agency’s social media account that rocked the bitcoin world earlier this week ahead of the regulator’s approval of a bitcoin exchange-traded fund late Wednesday.
“The SEC continues to investigate the matter and is coordinating with appropriate law enforcement entities, including the SEC’s Office of the Inspector General and the FBI,” an SEC spokesperson said in a statement.
The SEC said that the “unauthorized content” on the agency’s verified account on X (formerly known as Twitter) was “not drafted or created by the SEC.”
Bitcoin prices briefly jumped on Tuesday after the SEC’s account on X posted a message saying the regulator approved multiple bitcoin ETFs.
SEC approval has been highly anticipated by crypto investors as it would help bring bitcoin further into the mainstream and make it easier for people to buy. One crypto exchange, Coinbase, even posted a celebratory message on social media Tuesday.
However, 15 minutes later SEC Chair Gary Gensler said the agency’s account was “compromised,” allowing for an “unauthorized” tweet to get posted.
“I’m concerned that unauthorized access to SEC accounts could undermine our markets and the agency’s mission,” Sen. Sherrod Brown, chairman of the Senate Banking Committee, said in a statement on Wednesday.
Brown said he expects the SEC to keep the committee updated and encouraged the Office of the SEC Inspector General to look into the incident as well.
Republican Sens. JD Vance and Thom Tillis slammed the SEC in a letter to Gensler on Wednesday night.
“It is unacceptable that the agency entrusted with regulating the epicenter of the world’s capital markets would make such a colossal error,” they wrote.
Regulating the regulator
The false announcement could have had huge, market-moving implications: ETFs for bitcoin could drive as much as $100 billion in investment this year if approved, said Nick Smart, director of intelligence at Crystal Blockchain.
Bitcoin and other digital assets experienced significant price fluctuations after the fake message was posted Tuesday: Bitcoin prices shot up by more than 2.5% before falling again as the news crossed and misinformation quickly spread across various media platforms. On Wednesday, after the SEC released its official decision to approve an ETF, the cryptocurrency rose by 0.3% to nearly $46,000, according to data on coinmarketcap.com.
A spokesperson for X later said that the SEC’s social media account lacked the basic security measure of two-factor authentication, raising serious questions about the agency’s cybersecurity protocols.
That alleged lack of security is particularly befuddling, given the SEC’s previous ruling that social media posts could serve as public announcements for investors.
The financial community is closely monitoring the SEC’s response to this breach, which could lead to significant changes in how financial information is disseminated in the digital age.
Additional reporting by Nicole Goodkind
