The U.S. Securities and Exchange Commission’s X page was hacked recently, according to SEC Chair Gary Gensler.
The result of the hack was a post stating that the SEC was launching a new tool to track the price of cryptocurrency.
Many saw this as a long-awaited endorsement of cryptocurrency as a recognized currency that set off a euphoric few minutes for crypto investors before Gensler quickly announced the hack.
The breach disrupted years of anticipation for a Bitcoin Exchange-Traded Fund (ETF), buoying hopes of a potential 60% surge in Bitcoin’s value.
The unidentified hacker gained control through a compromised phone number, exploiting the lack of two-factor authentication on the SEC’s X handle.
The aftermath saw Bitcoin’s price briefly soar to $48,000 before a retreat to $45,000 after the hack’s disclosure.
Gensler followed up the hack with a warning to investors of the risks of crypto investments.
If you're considering an investment involving crypto assets, be cautious.
Crypto asset securities may be marketed as new opportunities but there are serious risks involved.
Read @SEC_Investor_Ed's Director Take:
— Gary Gensler (@GaryGensler) January 9, 2024
While Bitcoin is legal in most countries including the United States, it is only treated as a recognized currency in El Salvador and The Central African Republic.
In the U.S., Bitcoin is treated as property and taxed accordingly.
As such, the SEC treats Bitcoin as a commodity, and following the failures of several large crypto companies like FTX, BlockFi, and Voyager Digital, the SEC has stepped up efforts to subject crypto companies to a full gamut of financial regulations.
The SEC post by the hacker indicated that the SEC was recognizing Exchange-Traded Funds (ETFs), thus suggesting a change in the way Bitcoin is viewed, and legitimizing cryptocurrency with the weight of the U.S. government.