SEC’s Twitter Hack: A Moment of Chaos in the Bitcoin ETF Universe

The cryptocurrency market experienced a brief surge when a post on the US Securities and Exchange Commission’s (SEC) X account claimed the approval of new Bitcoin exchange-traded funds (ETFs). However, the excitement was short-lived as the SEC quickly refuted the announcement, stating that their account had been compromised.

The Unexpected Announcement

On Tuesday, a post appeared on the SEC’s official X account, indicating that the regulatory body had given the green light for Bitcoin ETFs to be listed on all registered national securities exchanges. The news spread like wildfire, picked up by social media users and business news outlets, causing Bitcoin’s value to jump to almost $48,000. However, the joy was temporary, as the post was soon deleted.

The Swift Refutation

Minutes after the initial post, Gary Gensler, the chair of the SEC, refuted the announcement on his personal X account. He clarified that the SEC’s Twitter account had been compromised and that the SEC had not approved the listing and trading of spot Bitcoin exchange-traded products. An SEC spokesperson further confirmed that there had been unauthorized access to the SEC’s X account by an unknown party, which had since been terminated.

The Investigation

Following the incident, X conducted a preliminary investigation into the false post on the SEC’s account. They confirmed that the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual gaining control over a phone number associated with the SEC’s account through a third party. It was also revealed that the account did not have two-factor authentication enabled at the time it was compromised.

The Aftermath and Future Expectations

Despite the uncertainty, it’s reported that the SEC is set to deliberate on the filings from the exchanges this week. Concurrently, they might also take action on the applications from the issuers. If the SEC provides the necessary approvals for both, the ETFs could commence trading as soon as the following business day. This has led to increased speculation and expectations for a Bitcoin ETF, especially after the SEC’s legal setback against Grayscale Investments in August.

The unauthorized tweet from the SEC’s compromised account had a profound effect on the Bitcoin market. Following the unauthorized post, Bitcoin’s price experienced a brief surge, rising from $46,500 to a high of $47,897, marking a swift increase of 2.66%. However, the SEC quickly denied the announcement, leading to a drop in Bitcoin’s price to as low as $44,903.

This development comes after Cathie Wood, the CEO of Ark Investment Management, shared her views on the potential spot Bitcoin ETF approvals by the SEC in an interview with CNBC. The collaborative proposal from her company and 21 shares was slated for review on January 10. This date marked the inaugural deadline for spot Bitcoin ETF submissions for this year.

Categorized in: