On Tuesday, the U.S. Securities and Exchange Commission (SEC) revealed that a message on the social platform X (formerly Twitter) announcing the approval of a long-awaited bitcoin exchange-traded fund (ETF) was not authorized. The SEC stated that its account was hacked.
Following the unauthorized post, the price of bitcoin briefly surged by over $1,000. The misleading message claimed, “The SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges.” Prior to this, cryptocurrency investors had already pushed bitcoin’s price above $46,000 in anticipation of the supposed approval.
SEC Denies Bitcoin ETF Approval
The prospect of a bitcoin exchange-traded fund (ETF) stirred excitement as it promised an alternative investment route for those not keen on directly purchasing the cryptocurrency on platforms like Binance or Coinbase.
However, the enthusiasm was short-lived as SEC Chairman Gary Gensler swiftly clarified on his personal account that the SEC’s announcement was unauthorized. Gensler emphasized, “The SEC has not approved the listing and trading of spot bitcoin exchange-traded products,” offering no further details on the breach.
Cory Klippsten, CEO of Swan Bitcoin, expressed disappointment on X, echoing the sentiments of many bitcoin investors who had anticipated potential approval from the SEC in the current week.
The market reaction was swift, with bitcoin’s price surging from approximately $46,730 to just below $48,000 after the initial unauthorized announcement. Subsequently, it dropped to around $45,200 following the SEC’s denial, eventually stabilizing around $46,150 by 6:15 p.m. ET.
The method by which the SEC’s social media account was compromised remained unclear. Shortly after Gensler’s statement, indications suggested that the SEC had regained control over the compromised account.
SEC Faces Criticism Over Account Security Amid Bitcoin ETF Controversy
In the aftermath of the SEC’s unauthorized announcement regarding a bitcoin exchange-traded fund (ETF), politicians, particularly frustrated Republicans, swiftly expressed anger at the perceived lax security controls over the SEC’s accounts. Senator Bill Hagerty, a Republican from Tennessee and a member of the Senate Banking Committee, called for accountability, drawing parallels with how the SEC would demand answers from a public company in the case of a colossal market-moving mistake.
This incident isn’t the first time false market-moving information has circulated about the future of bitcoin on regulated exchanges. In October, a misleading report suggested that BlackRock had received approval for a bitcoin ETF, leading to a sharp increase in bitcoin prices.
The situation also brings attention to broader concerns about account security on social media platforms. Elon Musk’s restructuring of Twitter’s content moderation and security teams in late 2022 is cited as an example. While internet watchdog groups voice complaints about a rise in toxic content, including hate speech, on X (formerly Twitter), there is also growing apprehension about the integrity of user accounts.
Brett Callow, an analyst with the cybersecurity firm Emsisoft, emphasized the potential significance of account takeovers, especially during an election year. The incident involving the SEC adds to the growing scrutiny over the security measures employed by regulatory bodies and the platforms they use to communicate important financial information.
Important:Â Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
Â
Join Cryptos Headlines Community
Follow Cryptos Headlines on Google News
