SEC Confirms Security of Other Systems Post-X Account Hack

• SEC Ensures No Systems were Breached during Recent Bitcoin ETF Approval Hoax
• Details of the Incident
• Following Up on the Security Breach
• FBI and CISA Investigation
• Approval of Bitcoin ETF Applications
• Reactions to the Incident
• Potential Impact on Public Markets
• Ensuring Cybersecurity in the Future

SEC Ensures No Systems were Breached during Recent Bitcoin ETF Approval Hoax

The U.S. Securities and Exchange Commission (SEC) confirmed on Friday that its systems and devices were not compromised by the individual who distributed a false bitcoin ETF endorsement announcement via social media. The supposed approval of several spot bitcoin exchange-traded fund (ETF) applications caused quite a stir on Tuesday, only to be revealed as a hoax by someone who had gained access to the official SEC social media account.

Details of the Incident

On Tuesday, the initial unauthorized post was made at 4:11 p.m. ET (21:11 UTC), as revealed by the SEC's statement. Gary Gensler, Chair of the SEC, published a clarification just 15 minutes later. The agency maintains that their staff managed to retain control of the account throughout the incident. Within half an hour of the initial post, the fake announcement had been removed, some bitcoin-related posts un-liked, and an update shared via the main SEC social media account.

Following Up on the Security Breach

SEC staff also contacted the social media platform for assistance in barring the unauthorized access to their account. Based on available information, it was concluded that the unauthorized access was terminated between 4:40 pm ET and 5:30 pm ET.

FBI and CISA Investigation

A spokesperson for the SEC mentioned on Wednesday that the issue is under FBI investigation. The rumor that the fake approval notice was an unplanned announcement released prematurely was simultaneously dispelled. The Department of Homeland Security's Cybersecurity and Infrastructure Security Agency (CISA) was included in the investigation as per Friday's statement.

Approval of Bitcoin ETF Applications

It is worth noting that the SEC did authorize nearly a dozen bitcoin ETF applications on Wednesday, which commenced trading the subsequent day.

Reactions to the Incident

The security breach caused alarm among lawmakers, leading to public demands for explanations regarding the incident. Senators Ron Wyden and Cynthia Lummis requested SEC Inspector General Deborah Jeffrey's openness in investigating the hack and any potential failure on the SEC's part to adhere to cybersecurity best practices.

Potential Impact on Public Markets

The Senators raised concerns about future hacks that could pose a threat to public markets and their stability. Senators J.D. Vance and Thom Tillis also prompted Gensler to brief their teams on various concerns surrounding the hacking incident and the SEC's decisions regarding bitcoin ETFs.

Ensuring Cybersecurity in the Future

The SEC affirmed its commitment to cybersecurity obligations on Friday. While staff are still evaluating the impacts of this incident on the agency, investors, and the marketplace, they acknowledge concerns about the security of the SEC's social media accounts. The agency also assured that it will continue to assess necessary additional remedial measures.

Edited by Jonathan Stoker