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SEC may need to “investigate itself” for market manipulation after X account breach

The price of Bitcoin jumped last night after a hacker falsely announced the first US spot Bitcoin ETFs had been approved via the SEC’s official X account.

Bitcoin ETF approvals were given a false start last night, following a breach of the United States Securities and Exchange Commission’s (SEC) X account.

“Today the SEC grants approval for Bitcoin ETFs for listing on all registered national securities exchanges”, the now-deleted tweet stated, sending Bitcoin on a vertiginous upward trajectory.

Fifteen minutes later, SEC Chair Gary Gensler tweeted that the SEC’s account had been compromised, and the Commission “has not approved” any Bitcoin ETFs, sending the price of Bitcoin back down by 7%.

News of approval would be in line with analyst predictions of a 95% chance of approval by January 10 – the deadline for Ark Invest and 21Shares’ ETF – if not sooner.

The security team at X have now confirmed the hack was linked to a SIM Swap attack, meaning the hacker gained control over the account’s linked phone number, allowing them to gain access.

X tweeted, “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 SEC also did not have two-factor authentication enabled, X found.

The crypto community questioned the SEC’s competence following the breach, asking, “How are you supposed to protect investors when you can’t even protect your Twitter account?”.

Another asked, “You usually give penalties in the 100s of millions when other private investment firms make mistakes like this that manipulate the market… What will you do to fix this?”, garnering thousands of likes and retweets.

Popular on-chain sleuth ZachXBT reminded Gensler of his own advice to Twitter users, such as enabling 2FA:

Securities lawyers reportedly told Fox Business that the SEC will likely “have to investigate itself” for market manipulation after moving the price of Bitcoin up and down following the hack.

Fox Business’s Charles Gasparino commented that it would be “unprecedented” for the SEC to not approve the ETF applications at this point, stating “it has never rejected ETF applications that have gone as far as these”.

Read more: Matrixport: SEC likely to reject all spot Bitcoin ETFs in January, driving -20% price correction

Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

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