The Bitcoin ETF saga took an unexpected twist on Wednesday. While the market eagerly awaited the regulator’s approval of the Bitcoin ETF, the Securities and Exchange Commission (SEC) announced that the Federal Bureau of Investigation is probing into the hack of the SEC’s X account that occurred the day before.
“The SEC continues to investigate the matter and is coordinating with appropriate law enforcement entities, including the SEC's Office of the Inspector General and the FBI,” an agency spokesperson said in a statement.
The SEC also clarified that the unauthorized content on the SEC’s X account was not drafted or created by the SEC.
The SEC reminded the public that any actions taken by the regulator regarding exchange rule filings will be published on the official website https://sec.gov and then in the Federal Register, serving as the “first public indication of a Commission’s action.”
Tuesday’s hacked SEC tweet triggered a knee-jerk reaction in the price of Bitcoin (CRYPTO: BTC), which plummeted to $44,800 before bouncing back to $45,800, indicating some nervousness among investors.
Earlier on Wednesday, the social network, owned by Elon Musk, ruled out any flaws in its systems. They stated that the SEC’s account was compromised, but their preliminary investigation revealed that it wasn’t due to a breach of X’s systems.
Instead, it occurred because an unidentified individual gained control over a phone number associated with the account through a third party. Furthermore, the account did not have two-factor authentication enabled at the time of the compromise.
We can confirm that the account @SECGov was compromised and we have completed a preliminary investigation. 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…
— Safety (@Safety) January 10, 2024
Bloomberg quoted Kurt Gottschall, a partner at the law firm Haynes Boone and former SEC regional director, who highlighted the irony that the SEC has shown little sympathy toward public companies and asset managers that have experienced cybersecurity incidents.
“No matter what the SEC does today, investors have to remember that this is a worthless product” Dennis Kelleher, co-founder and CEO of Better Markets, said, during an interview on Bloomberg.
Kelleher has been a staunch opponent of the approval of a spot Bitcoin ETF, asserting that “Bitcoin has no legitimate use, neither tomorrow nor yesterday, and it continues to be the preferred financial instrument for speculators, gamblers, and criminals.”
“People need to understand that when they buy a crypto token they are buying a chip at the casino,” Kelleher added.
B/c you don't like the facts doesn't mean they are not facts. @Bitcoin & #crypto have no legitimate use; are the preferred financial product for criminals worldwide; are full of fraud & manipulation. Tokens are nothing more than chips you get at a gambling casino where the house…
— Dennis Kelleher (@DennisKelleher) January 10, 2024
Photo: Shutterstock
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