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Coinbase Extends Offer to Assist SEC With Cybersecurity After X Account Hack

2 mins
Updated by Kyle Baird
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In Brief

  • Coinbase, the largest US crypto exchange, has offered to assist the SEC with cybersecurity following a hack of the regulator's social media account.
  • The irony of the situation is that Coinbase is currently involved in a legal dispute with the SEC, which sued the company for operating an unregistered securities exchange.
  • The SEC has been criticized for failing to protect its own social media account with basic two-factor authentication, raising questions about its ability to regulate finance.
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In a bizarre twist of irony, America’s largest crypto exchange, Coinbase, has offered to help the Securities and Exchange Commission (SEC) with cybersecurity. Additionally, the proposition follows a hack of the regulator’s social media account and a fake post announcing spot Bitcoin ETF approvals. 

Attackers compromised the SEC’s official X account on January 9, enabling them to post fake news regarding spot Bitcoin ETF approvals.

Coinbase to the Rescue

Following an avalanche of conspiracy theories and speculation, the social media platform confirmed the hack.

On January 10, the X platform confirmed the compromise of the SEC account and announced the completion of a preliminary investigation.

“Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number associated with the @SECGov account through a third party.”

It also stated that when the account was compromised, it did not have two-factor authentication enabled.

Read more: How To Prepare for a Bitcoin ETF: A Step-by-Step Approach

In response to this, Coinbase’s chief security officer, Philip Martin, reached out with a “serious offer” of assistance.

“As a crypto exchange we’ve had a lot of experience with security protocols around social media, and as a veteran and patriot, I love to help my country,” he said. 

Furthermore, Coinbase chief legal officer Paul Grewal added

“The entire Coinbase team offers its help. We are committed to doing our part to ensure fair, orderly, and efficient markets for all Americans.”

Coinbase Chief Legal Officer Paul Grewal. Source: Forbes
Coinbase Chief Legal Officer Paul Grewal. Source: Forbes

The ironic thing is that Coinbase is currently engaging the SEC in a legal battle. In June, the regulator sued the firm for operating an unregistered securities exchange.

Moreover, the SEC has repeatedly stonewalled Coinbase, which has called for more clarity on crypto regulations and classifications. 

Nevertheless, whether this offer was genuine or not remains to be seen. Crypto lawyer Jeremy Hogan quipped, “You are cold, like ice. Dry ice.”

Earlier, Grewal tweeted, “Biting my tongue so hard it’s bleeding” in response to the news.

SEC Lambasted for Security Breach

Additionally, investors have lambasted the federal regulator for utterly failing to protect them. Crypto podcaster ‘Walker’ said

“The people in charge of “protecting investors” and “regulating” Bitcoin can’t even protect their own X account with basic 2FA. What a joke.”

Others echoed the sentiment, commenting:

“The fact that they didn’t even attempt to put 2FA on when they wield such power over markets with an utterance is not just embarrassing. It is reckless and irresponsible.”

Professional trader and chart guru Peter Brandt said Gary Gensler knows:

“A lot about things that are ‘compromised’ and ‘unauthorized.’”

He concluded:

“You should resign from the SEC in shame.”

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Martin Young
Martin Young is a seasoned cryptocurrency journalist and editor with over 7 years of experience covering the latest news and trends in the digital asset space. He is passionate about making complex blockchain, fintech, and macroeconomics concepts understandable for mainstream audiences.   Martin has been featured in top finance, technology, and crypto publications including BeInCrypto, CoinTelegraph, NewsBTC, FX Empire, and Asia Times. His articles provide an in-depth analysis of...