SEC Bitcoin Hack: X Confirms Account Did Not Have 2FA Enabled

After the US SEC account was compromised and posted a fake Bitcoin ETF approval announcement, X has shared its investigation of the hack.

SEC’s Account Was Compromised Due To An Individual Gaining Access To Its Phone Number

Earlier in the past day, the X handle of the US Securities and Exchange Commission (SEC) made a surprise announcement of the Bitcoin spot exchange-traded fund (ETF) gaining approval.

This post, however, in fact, turned out to be the product of the account becoming compromised. Not too long after, the commission removed the post and gave its clarification regarding the event.

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

X’s “Safety” handle has now looked into the compromise and revealed its findings from a preliminary investigation. “We can confirm that the account @SECGov was compromised and we have completed a preliminary investigation,” says X Safety.

“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,” the platform noted.

It would appear that the organization’s account was also not using two-factor authentication (2FA), a popular method of account protection where two forms of identification are used to verify a user login.

In such a method, the user doesn’t gain access to the account with just the username and password; they are also required to fill in one additional code, which could be a one-time-password (OTP) received by phone or email, depending on what type of 2FA the account has enabled.

2FA can be a strong form of protection and could potentially help prevent cases like the SEC account compromise. “We encourage all users to enable this extra layer of security,” advises X Safety.

Bitcoin Goes Through Volatility After The Fake ETF Approval Debacle

Given the market anticipation around the event, it’s not surprising that the Bitcoin price observed a special reaction after the ETF approval post was made and subsequently removed.

In an X post, Analyst Root has summed up the timeline of the volatility and how it corresponded to the different movements related to the SEC’s compromise.

Here is the chart shared by the analyst that highlights the price action in the asset:

From the graph, it’s visible that the asset rose up towards $48,000 initially, before quickly plunging back down under $45,000. The asset then made some recovery as the market became aware of the hack.

While the approval wasn’t real this time, perhaps the event could still provide a glimpse into how the market would react should the ETFs get approved for real. After everything, Bitcoin is now trading around the $46,000 level, still down around 2% in the last 24 hours.