Breach Breakdown: SEC’s X Hack Raises Questions on Cybersecurity Investments

Amidst the recent hack of the U.S. Securities and Exchange’s (SEC) X handle, the Office of the Inspector General’s investigation is underway. Recent developments, however, shed light on the agency’s efforts to enhance cybersecurity measures.

In a post on X, Fox Business journalist Eleanor Terrett revealed that two prior reports in 2022 and 2023 by the Inspector General (IG) underscored the need for internal systems compliance.

The Office of the Inspector General is currently conducting an investigation into the @SECGov X hack but two prior IG reports, one from 2022 & one from 2023, mentioned the importance of ensuring compliance of internal systems.

This past November, the IG requested information… https://t.co/K2ClSXaOmT pic.twitter.com/AstPxUD6ay

— Eleanor Terrett (@EleanorTerrett) January 17, 2024

In November, the IG requested information on the SEC’s implementation of multi-factor authentication. Notably, the agency’s 2023 Budget Justification outlines strategic plans to “strengthen security controls, policies, and procedures.” These plans also included hiring additional personnel who would “provide expertise in cloud computing… and help the agency comply with requirements mandated in a recent Executive Order to move the agency toward a ‘zero trust’ approach to cybersecurity.”

The details of the SEC’s X account hack remain uncertain, however, according to posts from Terrett on X, the Office of Public Affairs handles social media posts, as well as media requests and other responsibilities, including news releases, speeches and statements, social media posts, reports and publications, and video and other media productions, among others.

The SEC’s X account was hacked on January 9, 2024, a day before the much anticipated Bitcoin Spot ETF approval. Reportedly, an unauthorized party gained access to the handle by obtaining control over the phone number associated with the account. The incident resulted in a 2.5% fall in the price of Bitcoin as well as a $40 billion swing in the combined value of the cryptocurrency in circulation.

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