SEC’s account compromise was ‘not due to any breach of X’s systems,’ company says

INDIA – 2021/10/16: In this Photo illustration a Bitcoin logo seen displayed on a smartphone with an ETF(exchange traded fund) logo in the background. (Photo Illustration by Avishek Das/SOPA Images/LightRocket via Getty Images)

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Social media company X said late Tuesday it has completed a preliminary probe into the compromised account of the U.S. Securities and Exchange Commission that displayed a false post claiming the SEC had approved bitcoin ETFs for trading.

“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,” said X, formerly Twitter, in the post, confirming that the SEC’s account was compromised.

“We can also confirm that the account did not have two-factor authentication enabled at the time the account was compromised,” said X in the post.

Bitcoin prices shot up following the unauthorized post, but soon fell below $46,000 after the SEC clarified that it had not yet approved the bitcoin ETF. It was trading at nearly $45,958 at about 12:20 a.m. ET.

“The SEC’s @SECGov X/Twitter account has been compromised. The unauthorized tweet regarding bitcoin ETFs was not made by the SEC or its staff,” an SEC spokesperson told CNBC on Tuesday afternoon.

The false social media post said the regulator had approved bitcoin ETFs for trading, which was denied by SEC Chair Gary Gensler.

The market anticipates the regulator to greenlight the bitcoin ETF. The SEC is expected to make a decision on it this week after opposing the idea for years.

Gensler has gone after crypto during his tenure, with the SEC taking legal action against exchanges such as Coinbase, Binance and Kraken, as well as blockchain-based payments firm Ripple, accusing each of selling unregistered securities.

– CNBC’s Jesse Pound contributed to this report.

Correction: This article has been updated to accurately characterize Ripple as a blockchain-based payments firm. An earlier version of the story mischaracterized it.

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