Inside job or hack? Crypto reacts to SEC’s fake bitcoin ETF approval

The Securities and Exchange Commission (SEC) says it’s investigating the compromise of its X (formerly Twitter) account, after an “unidentified person” gained access and posted that it had approved a much-anticipated spot bitcoin ETF.

The fake post garnered immediate reaction from crypto enthusiasts, with bitcoin’s price jumping 2.2% immediately after. When the SEC said it was fake minutes later, BTC dropped rapidly by 4.5%. The event resulted in $90 million in long and short positions to be liquidated, CoinDesk reported.

The incident prompted an investigation from X, which said it had found that the person responsible had access to the phone number attached to the SEC account.

“We can confirm that the account @SECGov was compromised,” X’s safety account wrote. “Based on our investigation, the compromise was… due to an unidentified individual obtaining control over a phone number associated with the @SECGov account through a third party.”

X continued to say that the SEC’s account didn’t have two-factor authentication enabled at the time. This prompted some in the crypto community to attempt to infiltrate the SEC’s account by guessing the associated email address.

[email protected]?

Other reactions from the crypto community involved skepticism, memes, and investigations into the person(s) responsible.

Who posted the SEC’s approval of a bitcoin ETF?

Memes about the SEC post ran rampant online. Popular influencer Autism Capital pointed the finger at Sam Bankman-Fried in a tongue-in-cheek post. Another joked that disgraced influencer BitBoy was “caught trying to take matters into his own hands.”

Others, however, dug deeper into the incident. “Gary never said the SEC’s account was compromised by an external hacker,” Jameson Lopp pointed out. “It could have been compromised by internal incompetence.”

Indeed, the question on everyone’s mind seems to be whether the post was truly a hack, a social media intern’s blunder, or an orchestrated attempt by the SEC to delay a decision on spot bitcoin ETFs.

Knew it.

Read more: The latest in the spot bitcoin ETF news frenzy

The SEC’s uncharacteristicly coordinated and swift response to the post raised skepticism from observers. “I am no cybersecurity expert, but it seems almost impossible to notice a bad tweet from org account, tweet from the chair’s account to correct it, then recover a hacked social media account, then tweet about incident and response to it from hacked account, all in a few minutes…” VanEck advisor Gabor Gurbacs wrote.

“What if this is an inside job? Is the only way to stop or delay a Bitcoin ETF to create an event like this?” he added.

On the other hand, some evidence strongly supports the theory that the SEC’s account was hacked by a bitcoin fan. Right before the post, the SEC tweeted “$BTC” and quickly deleted it. The account’s liked posts showed it had engaged with two posts that aren’t associated with the SEC, another uncharacteristic move.

The SEC account posted and deleted “$BTC” prior to sending the fake announcement (via Cointelegraph).

Further, details of the post itself indicate that it was unlikely to have been a scheduled post that a hacker found and decided to publish. Users pointed to the unusual use of #Bitcoin in the messaging. Cointelegraph noted that the attached image doesn’t align with design standards in previous media, such as a missing logo and lack of capitalization.

The SEC’s odd post has provided crypto enthusiasts with another compelling whodunnit just days into 2024. The commission maintains that its staff had zero involvement with the incident, and has yet to made a formal decision on a spot bitcoin ETF.

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