The Crypto World Is Losing Its Mind Over the SEC’s Twitter (X) Debacle

The Crypto World Is Losing Its Mind Over the SEC’s Twitter (X) Debacle

The X account belonging to the Securities and Exchange Commission was recently hacked, allowing a fake announcement to be posted to the web concerning a much-awaited happening in the crypto world: the first Bitcoin ETFs. The announcement claimed the ETFs had been approved but, as it turns out, that’s not true. When it became apparent that the announcement was, indeed, fake, all hell broke loose in the web3 community.

On X, the tenor of the conversation among crypto denizens was equal parts shock, disbelief, and wrath, with just a hint of paranoia. Many Bitcoin acolytes expressed skepticism that the agency’s account had actually been hacked and presumed that some sort of government plot was afoot. Others simply railed against the agency for perceived incompetence.

Frankly, the outrage here is sorta understandable, since the Bitcoin ETF launch has been a much hyped event and is perceived to be a pivotal juncture for an industry that’s been put through the ringer lately.

“It’s most likely one of the guys at the SEC jumped the gun on the announcement and now they are backpedaling hard. That message was too perfectly written to be some hacker. It was likely a saved draft,” speculated one widely followed crypto account on X.

“I am no cybersecurity expert, but it seems almost impossible to notice a bad tweet from org account, tweet from the chair’s account to correct it, then recover a hacked social media account, then tweet about incident and response to it from hacked account, all in a few minutes,” speculated one crypto user.

Edward Snowden, who is a bit of a crypto fanatic, called out Gary Gensler, chair of the SEC, tweeting: “jesus christ gary get your shit together.”

Many upset crypto stans looked to Elon Musk for help, asking the billionaire owner of the platform to “check the IP” address of the poster to validate whether the SEC’s account had actually been hacked or not. “I CANNOT wait for @elonmusk to post a tweet proving the @SECGov account was NOT hacked but was indeed @GaryGensler making an oopsies but still suffering no repercussions,” one account tweeted. As far as can be discerned, Musk hasn’t commented on the incident.

Frankly, the question of what happened to the SEC’s account is still anything but clear. In a statement shared with journalists, the agency has said only the following:

The SEC has determined that there was unauthorized access to and activity on the @SECGov account by an unknown party for a brief period of time shortly after 4 pm ET. That unauthorized access has been terminated. The SEC will work with law enforcement and our partners across government to investigate the matter and determine appropriate next steps relating to both unauthorized access and any related misconduct.

So, that’s about as clear as mud. The SEC’s account getting hacked wouldn’t be that out of the ordinary since Twitter’s cybersecurity has historically been terrible. Sure, Twitter is technically X now, but just the other day the account belonging to Mandiant, a top cybersecurity company, was compromised by a hacker, who used the access to promote a crypto scam. All of that said, the timing of the SEC’s incident—right before a major ruling—does make the whole thing seem a little weirder than usual. How, exactly, the SEC’s account was accessed is the part we don’t know—and it’s sorta the critical part.

For weeks, folks in the financial sector and the crypto community have been expecting the SEC to approve the Bitcoin ETFs. Those ETFs (short for an exchange-traded fund), would allow average “normies” to invest in Bitcoin much more easily. Users would be able to invest in the assets using their normal brokerage accounts—like Fidelity—instead of having to do so via the more arcane process of crypto exchanges and cold storage. In short: It would make Bitcoin much more like a normal stock.

A number of brokerage and crypto firms, including financial giants Fidelity and Blackrock, have submitted applications to launch funds, and large parts of the finance industry have been expecting the SEC to go through with their approvals. Notably, the SEC has rejected all previous pleas for a Bitcoin ETF. It’s unclear whether this time will prove the exception.

This is pretty much the last thing crypto needed right now. Things have been quite dour in the decentralized web and it’s not hard to see why. After a long and brutal “crypto winter,” lagging Bitcoin enthusiasm, the FTX implosion, an ever-escalating federal crackdown, and the embarassing death of NFTs, digital assets and their patrons really, really needed a win. For a brief moment on Tuesday, it really looked like Gensler was going to give it to them. Then, appropriately, like some sort of perverse “rug pull,” it turned out to be just another false promise in an industry littered with them.

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