SEC Attributes Bitcoin ETF Approval Tweet to ‘Compromised’ Account
Mitchell Nixon
On Tuesday, the Securities and Exchange Commission (SEC) revealed that a tweet made from the agency’s Twitter/X account, confirming the long-awaited approval of a Bitcoin exchange-traded fund (ETF), was “unauthorised.” The SEC stated that their account had been “compromised.”
Bitcoin’s value surged over $1,000 following the X post above claiming, “Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges.”
SEC Chair Gary Gensler clarified quickly on his personal account that the SEC’s account was compromised, stating, “the SEC has not approved the listing and trading of spot bitcoin exchange-traded products.” He labelled the post unauthorised but didn’t elaborate.
The @SECGov twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
— Gary Gensler (@GaryGensler) January 9, 2024
CoinGlass data indicates that volatile price movements led to the liquidation of more than $50 million in derivative trading positions across crypto exchanges within an hour. Liquidations happen when an exchange forcibly closes a trader’s open position using borrowed funds because of margin losses.
Despite launching an investigation into the social media account hack, the United States Securities and Exchange Commission (SEC) is expected to proceed with a decision on spot Bitcoin ETFs this week.
Certain observers express concern that this mishap might serve as a justification to extend the decision beyond the expected deadline of January 10, although many consider this to be a highly unlikely scenario.
Dennis Porter, CEO of Satoshi Action Fund, mentioned in a note: “It depends on the intention of the SEC. If the SEC is looking for ways to continue delaying the ETF process, it’s possible they could use this as a reason to slow down the roll out.”
Porter indicated that his sources suggest the Securities and Exchange Commission will approve the spot Bitcoin ETF applicants on January 10: “However, everything I am hearing from my contacts would suggest that the ETF will be here as late as this week, and as early as tomorrow.”
U.S. attorney and commercial litigator Joe Carlasare acknowledged the potential for anything to occur but leaned towards the SEC making a decision by the January 10 deadline: “Anything is possible, but I find [it] to be extremely unlikely [that] they aren’t going to approve or reject based on this incident.”
Yet, Mati Greenspan from Quantum Economics suggests the securities regulator might exploit the false post to support a delay agenda: “I can certainly see a situation where the SEC would try to use this fiasco as a way to delay the ETF approval. It wouldn’t be the first time they’ve used underhanded methods to force their agenda on the markets.”
Bloomberg ETF analyst Eric Balchunas anticipates official approval for the spot Bitcoin ETFs between 4:00 pm to 5:00 pm Eastern Time (9:00 pm to 10:00 pm UTC) on January 10.
“We can confirm that the account SECGov was compromised and we have completed a preliminary investigation. Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number associated with the SECGov account through a third party. We can also confirm that the account did not have two-factor authentication enabled at the time the account was compromised. We encourage all users to enable this extra layer of security.”
Well, it’s certainly ironic that a US Official Government X account (the SEC) did not have 2FA set up.
They should take a leaf out of Gary’s book:
Well, what’s more ironic is that the SEC has now caused market manipulation via one of their official accounts.
Few hundreds of millions in fines then for failing to protect the retail investor?