Questions are being raised over security measures at X after hackers were blamed for a fake post on the US financial market regulator’s account that prompted a jump in the value of Bitcoin.

Crypto investors were widely anticipating confirmation from the US Securities and Exchange Commission (SEC) this week that it had approved a Bitcoin exchange-traded fund.

Such a move would allow investment without the need to buy Bitcoin through an exchange.

So there were initially no alarm bells when the SEC’s X account revealed on Tuesday night that it had granted “approval for #Bitcoin ETFs for listing on all registered national securities exchanges.”

Bitcoin’s value stood just below $48,000 in the wake of the post, having shot up from around $46,730.

But that growth was soon erased when SEC chairman Gary Gensler used his personal account on X to declare that the SEC’s account had been compromised.

“The SEC has not approved the listing and trading of spot bitcoin exchange-traded products,” he said.

He called the post “unauthorized”, without providing further explanation.

Bitcoin was trading at $45,600 on Wednesday morning.

X said via its safety account that a preliminary investigation had found “an unidentified individual” had taken control of a phone number associated with the SEC account “through a third party.”

It went on to explain that @SecGov did not have two-factor authentication activated, as X recommends.

While US politicians criticised the SEC for its security controls, others pointed the finger of blame at Elon Musk’s company.

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He took an axe to content moderation and security teams after taking over the platform, then known as Twitter, in late 2022.

Austin Berglas, a former cybersecurity official at the FBI’s New York office and a senior executive at the security firm
BlueVoyant, said of the incident: “Something like that, where you can take over the SEC account and potentially affect the value of bitcoin in the market – there’s massive opportunity for disinformation.”

Brett Callow, an analyst with the cybersecurity firm Emsisoft, added: “The consequences of account takeovers could potentially be significant, and especially during an election year.”

X was yet to provide a statement.

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