The U.S. Securities and Exchange Commission (SEC) recently fell victim to a social media account hack, which was attributed to a ‘SIM Swap’ attack. The hackers used the compromised account to make a false announcement about a Bitcoin Exchange-Traded Fund (ETF). This incident has raised concerns about the security of digital assets and the vulnerability of social media platforms to cyber-attacks.

Understanding the ‘SIM Swap’ Attack

A ‘SIM Swap’ attack, also known as SIM jacking, is a type of identity theft where the attacker convinces the mobile service provider to port a target’s phone number to a new SIM card controlled by the attacker. Once successful, the attacker can bypass two-factor authentication and password recovery systems that send a code to the phone, gaining control over email, social media, and financial accounts.

The False Bitcoin ETF Announcement

Using the SEC’s compromised social media account, the hackers announced the approval of a Bitcoin ETF, a long-awaited event in the cryptocurrency world. The false announcement caused a brief spike in Bitcoin’s price, demonstrating the potential impact of such misinformation.

• Immediate Impact: The false announcement led to a temporary surge in Bitcoin’s price, reflecting the market’s sensitivity to such news.
• Long-term Implications: The incident highlighted the potential for market manipulation through social media and the need for stronger security measures.

How the SEC Responded

The SEC quickly identified and rectified the breach, clarifying that the Bitcoin ETF announcement was false. The commission is now working with law enforcement agencies to investigate the incident and strengthen its security measures to prevent future attacks.

Implications for Digital Asset Security

This incident underscores the importance of robust security measures for digital assets. It highlights the need for:

• Stronger Authentication Measures: Two-factor authentication, while generally effective, can be bypassed in a SIM Swap attack. This calls for more robust security measures, such as biometric authentication or hardware tokens.
• Improved Social Media Security: Social media platforms need to enhance their security protocols to prevent account takeovers.
• Regulatory Oversight: Regulatory bodies like the SEC need to ensure that accurate information is disseminated to prevent market manipulation.

Preventing SIM Swap Attacks

While SIM Swap attacks are sophisticated, there are steps that individuals and organizations can take to protect themselves:

• Use Non-SMS Two-Factor Authentication: Opt for authentication methods that do not rely on SMS, such as authenticator apps or hardware tokens.
• Limit Personal Information Sharing: The less personal information available online, the harder it is for an attacker to impersonate you to your mobile service provider.
• Regularly Monitor Accounts: Regularly check your financial and social media accounts for any suspicious activity.

Conclusion

The recent SEC social media hack serves as a stark reminder of the potential vulnerabilities in our increasingly digital world. While the false Bitcoin ETF announcement was quickly debunked, the incident highlights the potential for market manipulation through social media and the importance of robust digital security measures. As we continue to navigate the digital landscape, it is crucial for individuals, organizations, and regulatory bodies to remain vigilant and proactive in protecting digital assets.

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The problem of eroding trust in the media seems to arise increasingly where corporate and state interests cross the free press. The media plays a key role in combating corruption, yet it seems the days of publishers suing governments over press freedom are largely over. As reporting made way for ‘content’ and authors turned into ‘influencers’, the stage has been set to foster media corruption: Thou shalt not piss on the foot that kicks its scraps towards thy.

A recent example of the free press representing corporate (and intelligence) interests can be found in Bloomberg’s coverage of the Bitcoin Fog trial; and the problem begins as early as the headline.

In “Wall Street-Backed Crypto Tracer Faces ‘Junk Science’ Attack”, we can firstly find the allegation that the definition of non-scientifically proven software as ‘Junk Science’ is some sort of newly found conspiracy – when the US based innocence project, which has dedicated itself to criminal justice reform, frequently uses the term to describe flawed forensics methods.

Junk science describes the use of non-scientific methods to prove (or disprove) a hypothesis. In legal contexts, scientific accuracy is determined via the Daubert standard, which defines the following methodologies which cannot be met by Chainalysis Inc. as uncovered in the Bitcoin Fog case: whether the method has a known error rate, whether the method has been subjected to peer review and publication, and whether the method applied is generally accepted by the scientific community.

“Chainalysis is looking into the potential of trying to collect and record any potential false positives and margin of error, but such a collection does not currently exist,” reads an official Chainalysis statement addressing the case.

Blockchain Forensics expert Jonelle Still of the chain surveillance firm Ciphertrace has described the use of Chainalysis’ heuristics as “reckless” in an expert report issued in the Sterlingov case, stating that “Law enforcement and other customers of Chainalysis have approached CipherTrace on this topic and have expressed frustration related to the errors they experience using Chainalysis Reactor.” According to Still, “Chainalysis attribution data should not be used in court for this case nor any other case: it has not been audited, the model has not been validated, nor has the collection trail been identified.”

Instead, however, Bloomberg chose to cite a September 11th filing, which alleges that “the FBI validates Chainalysis’ clustering every day, and it is ‘generally reliable and conservative.’” “Prosecutors said Chainalysis information is “frequently validated and found to be reliable” in supporting subpoenas and search warrants,” writes Bloomberg, apparently taking the state’s and Chainalysis’ word at face value – no questions asked – because what else would a journalist do.

What Bloomberg conveniently forgot to highlight is that the Department of Justice, too, has found blockchain forensics to be “highly imperfect”, specifically citing Chainalysis software in a report published in the Journal of Federal Law and Practice – ironically written by C. Alden Pelker, an expert in computer crime, who currently serves as co-counsel to Sterlingov’s prosecution.

The description of a software which fails to meet scientific standards is hence not an ‘attack’ but rather an accurate description within the meaning of the term in light of the facts at hand – all of which have been ignored by Bloomberg – which we can either ascribe to incredibly bad journalism, or outright corporate propagandaism.

Circling back to Bloomberg’s headline, this author would like to note that Chainalysis is not just backed by Wall Street, but also backed by In-Q-Tel, receiving over $1.6 Million from the Central Intelligence Agency’s ‘non-profit’ venture capital fund. How fortunate that this fact, too, appears to have escaped the Bloomberg author’s research capabilities.

TLDR: Corporate journalism has shit the free press’ bed once again, and it’s the people that continue to have to lie in it. Auld Lang Syne.

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This is an opinion editorial by Thierry Berger, a graduate of The University of Applied Sciences in Business Administration Zurich, based on his thesis “Bitcoin: How Social Media Influences Private Investors In Their Actions.”

A friend introduced me to the basics of Bitcoin years ago. I couldn’t believe my eyes when I looked at the price increases over the past few years after our conversation and I wondered: Will this alternative currency continue to rise in value, or is it a big Ponzi scheme that will soon collapse in on itself?

I started to read up on the subject and quickly realized that the influencers on Twitter were often playing with the emotions of their audiences — with fear and greed, to name the most common ones. I could hardly believe some of the exaggerated posts, and yet they drew me in.

It was obvious to me that social media influenced private individuals in their actions when it came to Bitcoin. In my studies, I learned about many theories and models in media psychology, which I can apply to the Bitcoin market and which might help others do the same.

Media Psychology Concepts And Bitcoin Twitter

The uses-and-gratifications theory assumes that recipients choose the medium that can best satisfy their needs. Depending on the medium, a person seeks information, entertainment, personal identity (reinforcement of one’s own values) or integration and social interaction (exchanges among like-minded people). For me, I mix all four motives right away.

The involvement concept, which suggests that a recipient can still be involved with the content of an article even days after reading it, if that person is directly affected by the developments or the views represented. However, this does not mean that attitudes can be permanently changed. The more involved a judging individual is in a topic, the less he or she can be influenced by persuasion from other opinions. The interplay between the emotions of greed and fear and the resulting experienced tension diminishes over time and with experience.

In my environment, everyone, without exception, has confirmed this phenomenon. After your first bitcoin purchase, for instance, you are susceptible to being easily manipulated. With every additional hour that you deal with the matter, your opinion becomes stronger. You may accept price distortions more and more easily and, in the meantime, see the incentive to buy sats at a lower price.

Remaining mindful of why you are on Bitcoin Twitter in the first place, and how the content there is impacting you, will help you navigate it.

How To Handle Bitcoin Twitter

The enormous price gains are, in my opinion, the strongest narrative that draws retail investors into the bitcoin market. The most common type of posts that I see on Bitcoin Twitter are positive price forecasts. These generate clicks, have the potential to trigger fear of missing out (FOMO) and entice private investors to make rash purchases.

How strongly an individual reacts to information with positive connotations, or to information with negative connotations in a phase of strong price decay, and whether an action results from this, ultimately depends on the motive and the experienced emotions of a recipient, as well as the behavior of the influencers consumed. But the natural human trait of being guided by emotions means that new investors could pay the highest prices at the end of an upswing and sell these positions at losses when prices correct, in fear of a total collapse. This is why anyone entering the Bitcoin space this way should keep in mind the psychological factors at play.

One suggestion I have is to remain strong-minded. If someone’s investment goes into the red, their mood usually dips. But losses and gains don’t materialize if you don’t cash out. But I believe that four out of five people don’t hold to this, emotionally. That’s where you have to be tough as nails. There is an age-old wisdom that should be drilled into every private investor: You can never catch two things, the top and the bottom. “Simply doing nothing” is historically best in a market that is going up in the medium to long term.

Another valuable lesson for me was to realize that, in today’s globally-connected world, it has become increasingly difficult to separate the clickbaiters and scammers from the valuable content with strong communities. This means that someone who wants to learn about Bitcoin via Twitter should first do the work of “separating the junk from the good sources” in their own research. An investment should never be made based on just one opinion or source.

Manipulation Via Media

Manipulation via media is by no means a new phenomenon and media history shows that it can hardly be eliminated with regulation.

But social media accelerates the impact of contributions and enlarges spheres of influence, accentuating the problem. My goal is to motivate critical engagement with media, even knowing that, globally, this is a difficult endeavor. After all, the ability to critically examine media and one’s own emotional reactions would be a considerable benefit in all areas of life.

This is a guest post by Thierry Berger. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Four media outlets in the United States have continued efforts to get the identities of non-U.S. FTX customers revealed, filing new objections to a previous motion to seal their identities. 

Bloomberg, Dow Jones, The New York Times and the Financial Times first filed a motion objecting to FTX and the Official Committee of Unsecured Creditors being authorized to redact and withhold customer information on Jan 11.

While the court previously had heard similar arguments by the four firms, the May 3 filing made a new objection to the Committee’s motion to seal the identities of non-U.S. customers.

The media outlet’s most recent argument is that there is no legal basis to redact the names pursuant to non-U.S. data privacy laws.

The media giants argued that under section 105 of the Bankruptcy Code — the provision which grants the bankruptcy court judicial power — there is no part that permits foreign law to override the right of access to information under U.S. constitutional and statutory law:

“At bottom, Movants desire to avoid ‘enforcement of the public disclosure requirements of U.S. bankruptcy law’ […] furnishes no basis for sealing.”

“The law of the United States — constitutional and statutory — guarantees the public a strong presumptive right to inspect bankruptcy filings. That right cannot be abrogated by a party’s assertion of legal obligations under foreign law,” the media firms added.

The first argument raised — which was claimed in an earlier filing — was that the names of FTX’s creditors do not constitute “confidential commercial information.”

The second — also raised in an earlier filing — is that such disclosure wouldn’t subject the creditors to “undue risk.”

Related: FTX has recovered $7.3B in assets, will consider rebooting exchange

FTX and the committee have until May 4 at 4:00 pm Eastern Time to submit an objection.

The hearing date for the filing will take place on May 17 at 1:00pm.

Magazine: Can you trust crypto exchanges after the collapse of FTX?