Social media platform X (formerly Twitter) said on Wednesday that the Securities and Exchange Commission’s account was compromised when it made a fake post about the regulator approving a spot bitcoin exchange-traded fund.
The social media platform said in a post that preliminary investigation showed the account was compromised by a third party gaining access to a phone number associated with the SEC, and that the account did not have two-factor authentication enabled at the time of the breach.
The announcement comes just a few hours after the SEC’s official X account made a post saying that the regulator had approved the listing of an ETF that directly tracked the spot price of bitcoin.
The fake post read:
“Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges.”
Chair Gary Gensler had almost immediately responded to the announcement, stating that the official SEC account was compromised and that the tweet was “unauthorized.”
The post triggered a brief spike in bitcoin prices, given that it came at a time when investors are awaiting an actual decision from the SEC on the listing of a spot bitcoin ETF.
Bitcoin traded down 1.8% at $46,109.7 by 22:51 ET (03:51 GMT), after briefly surging to nearly $48,000 after the fake SEC post.
The world’s largest cryptocurrency saw a sharp melt-up in the first week of 2024, amid growing speculation that the SEC was close to approving a spot-traded bitcoin ETF. The regulator is expected to make an announcement this week regarding applications from several fund managers for the ETF.
Aspirants including BlackRock Inc and Wisdomtree were seen altering their ETF applications last week, following guidance from the SEC.
But the securities regulator has so far shot down any attempts at listing a spot bitcoin ETF, citing a lack of proper protections for investors from price manipulation of the cryptocurrency.
Proponents of the cryptocurrency argue that the SEC’s rejections are unfounded and that the approval of a spot ETF is likely to draw widespread institutional capital into the token, given that it grants investors exposure to the token without needing to directly invest in cryptocurrencies.
But critics have questioned just how much institutional capital will flow into bitcoin after such an approval, given that current ETF offerings- which track bitcoin futures on the Chicago Mercantile Exchange- have seen dwindling investor interest over the past two years.
The broader crypto industry is also struggling with a massive loss of faith following a series of high-profile frauds and bankruptcies in 2022 and 2023. Trading volumes, particularly in Bitcoin, are also well below the highs seen during a bull run in 2021.
Comments are closed.