SEC claims “SIM swap” technique used in hacking X account to post fake spot Bitcoin ETF approval

• The Securities and Exchange Commission (SEC) stated that the regulator's telecom carrier was at the core of the hack.
• The SIM swap attack resulted in the X-authorized phone number being transferred to another phone.
• Bitcoin price rallied by 7% following the fake spot Bitcoin ETF approval and has not noted a rise as significant since then.

The last time Bitcoin price rallied was owing to a fake post about the spot Bitcoin ETF receiving approval, for which the Securities and Exchange Commission (SEC) received considerable flak. In response to this hack, the SEC stated it would be conducting an investigation, and per the recent findings, the regulator claims it is not at fault.

SEC sheds blame

In a statement on Monday, the regulatory body stated that the hack that occurred on January 8 was the result of a "SIM swap" attack. A SIM swap attack occurs when a hacker tricks a telecom provider into transferring a victim's phone number to a new SIM card under the attacker's control. This allows the attacker to intercept sensitive information, such as two-factor authentication codes, and gain unauthorized access to the victim's accounts and data.

The SEC faced a similar situation when the hacker gained control of the SEC cell phone number associated with the X account. The regulatory body added,

"Access to the phone number occurred via the telecom carrier, not via SEC systems. SEC staff have not identified any evidence that the unauthorized party gained access to SEC systems, data, devices, or other social media accounts."

Generally, social media accounts are protected by a feature known as multi-factor authorization (MFA), which prevents hacking via a simple password reset. The SEC had disabled this owing to access issues back in July 2023 and only enabled it following the hack. Had this been done beforehand, the market would have been saved from the millions of dollars of liquidations it witnessed.

Bitcoin price still awaiting bullish catalyst

Bitcoin price shot up by close to 7% on January 8, the day when the SEC's X account was hacked and the false spot Bitcoin ETF tweet was posted. After realizing the situation, the market practiced caution over the next couple of days, barely reacting on the day when the ETFs were officially approved by the regulator on January 10.

BTC/USD 1-day chart

BTC has not seen a rally since then; instead, most of the price action has been concentrated toward a decline, and the cryptocurrency is currently hovering around $40,000, awaiting a strong bullish catalyst to push Bitcoin back up toward $47,000.