Fake Announcement of "Physical ETF Approval" in X Account Takeover

On January 10, 2024, the financial world was rocked by a false SEC tweet announcing the approval of a physical Bitcoin ETF, leading to a significant market reaction.

This incident highlights critical issues in digital security and investor protection, raising questions about the integrity and safety of online financial communication.

Read on to understand the full impact of this cyber breach on the cryptocurrency market and investor confidence.

SEC's Misleading Tweet on Bitcoin ETF Approval Leads to Market Turmoil

In the early hours of January 10, 2024, a post on X (formerly Twitter) by the United States Securities and Exchange Commission (SEC) claimed the approval of a physical Bitcoin ETF.

It has now been revealed that this announcement was a result of a takeover of the X account, constituting a fake release.

The SEC had posted on January 10 that “The SEC has approved the listing of the Bitcoin ETF on the stock exchange.

The approved Bitcoin ETF will be subject to continuous monitoring and compliance measures for ongoing investor protection.”

However, it later emerged that this post, which had been uploaded and then removed from the @SECGov account on X, was not legitimate.

The SEC clarified that “The @SECGov Twitter account was compromised, and a fraudulent tweet was posted. The SEC has not approved the listing and trading of a physical Bitcoin ETF.”

Following the announcement of the ETF approval, the price of BTC momentarily surged to around $48,000. However, after the revelation that the post was a hoax, the price plummeted to about $45,000. As of the time of writing this article, the price stands at $45,750.

Recently, the SEC has repeatedly issued warnings about the risks of cryptocurrency investment and the FOMO associated with digital assets.

This incident has led to critical voices stating, “Before worrying about us, they should secure their own security,” and “How can they protect investors if they can’t even secure their X account?”

The Underlying Reasons for the False ETF Approval Post

It has been reported that the SEC announced that the fake post regarding the Bitcoin ETF was not made by its staff. However, the language used in the posted content seemed typical of the SEC, leading some to speculate that it might have been a scheduled post published on the wrong date.

There is widespread speculation that a physical Bitcoin ETF might be approved soon, with reports suggesting that an announcement could be made as early as January 11, 2024.

Security Lapse: Two-Factor Authentication Not Enabled on SEC's X Account

On January 10, 2024, X reported their investigation findings regarding the false post made from the SEC’s X account.

They clarified that the incident was not due to a breach in X’s system but was caused by an unidentified third party who managed to manipulate the account using a related phone number.

It was also reported that two-factor authentication had not been enabled on the @SECGov account at the time of the takeover. X is now recommending all its users to enable two-factor authentication on their accounts.

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