The SEC denies approving Bitcoin ETFs after a false tweet from their hacked account, causing market fluctuations and calls for investigation.
The United States has yet to witness the approval of a spot Bitcoin Exchange-Traded Fund (ETF) by the Securities and Exchange Commission (SEC). The false belief of such an approval emerged from a compromised tweet on the SEC’s X account on January 9. This misleading tweet, suggesting the green-lighting of Bitcoin ETFs in the U.S., was later rectified by SEC Chair Gary Gensler, who confirmed the account’s security breach.
The misinformation briefly escalated Bitcoin’s value by approximately 2.5%, pushing it to $47,901 before it plummeted about 7% to $44,701. This event has stirred the crypto community, leading to widespread speculation regarding the future of Bitcoin ETF approvals by the SEC.
SEC’s Response to the Misleading Information
The SEC clarified that they did not authorize the tweet. This clarification, however, has not completely convinced some community members. They speculate that the tweet could have been an inadvertent early release of a planned announcement. This theory stems from the tweet’s language and style, which closely resemble the SEC’s typical communication tone.
Additionally, the tweet’s unusual elements, like the use of the Bitcoin hashtag and icon and the term “Chair” for Gary Gensler, have raised doubts about its origin. This incident has prompted calls from U.S. lawyers and senators for a thorough investigation into the SEC’s practices and security measures.
Investigation and Security Measures Post-Incident
The SEC has committed to collaborating with law enforcement to investigate the hack. X, the platform where the breach occurred, acknowledged that the SEC’s account was compromised through a third party gaining control over a phone number linked to the account. The absence of two-factor authentication at the time of the incident was a significant security lapse.
Despite this turmoil, commentators in the crypto industry do not anticipate a delay in the decision regarding a spot Bitcoin ETF. Expected to be announced on January 10, this decision remains a focal point for both investors and regulators. Lastly, industry experts, including Dennis Porter, CEO of Satoshi Action Fund, and U.S. attorney Joe Carlasare, maintain that the SEC’s decision will likely proceed as planned, irrespective of the recent security breach.