The U.S. Securities and Exchange Commission (SEC) faced a misinformation issue when its official Twitter account was compromised. A false post, mistakenly announcing the approval of Bitcoin exchange-traded funds (ETFs), was published, leading the SEC Chair Gary Gensler and the regulatory body to quickly refute the erroneous information.
This misleading tweet caused Bitcoin’s price to briefly surge near $48,000. However, Gensler clarified on social media that the message was “unauthorized,” asserting that the SEC “has not approved the listing and trading of spot bitcoin exchange-traded products.”
The SEC followed up with a similar statement to rectify the situation. Prior to this event, Bitcoin’s value had more than doubled since last January, partly driven by expectations that an ETF approval would stimulate further digital currency purchases.
The false post on social media claimed that the SEC had greenlighted bitcoin ETFs for trading, which led to an immediate, albeit temporary, spike in Bitcoin’s price. The cryptocurrency’s value quickly fell below $46,000 after the clarification.
The @SECGov X account was compromised, and an unauthorized post was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
— U.S. Securities and Exchange Commission (@SECGov) January 9, 2024
The SEC is in the process of reviewing spot bitcoin ETFs, which would track the cryptocurrency’s actual market price, a decision that has been long-awaited and contested by the regulatory body. The anticipation has been heightened as more than a dozen asset managers have filed applications for such funds, many updating their registration statements just this Tuesday morning.
Currently, ETFs that follow the price of Bitcoin futures are already trading in the U.S. Crypto advocates believe that the introduction of spot bitcoin ETFs could attract a new wave of investors to digital assets. ETFs, commonly used by financial advisors, are seen as a more accessible investment vehicle for those hesitant about the complexities of direct bitcoin custody.
SEC Chair Gary Gensler has been a critic of cryptocurrencies during his tenure. The SEC has taken legal actions against several major crypto exchanges under his leadership. Gensler had previously used social media to caution investors about crypto-linked products.
Interestingly, last year, the SEC lost a lawsuit against crypto asset manager Grayscale over its request to convert a trust holding bitcoin into an ETF. The SEC’s decision not to appeal this ruling sparked speculation about the regulatory body potentially approving bitcoin ETFs in the near future. However, as of now, no official approval has been granted, leaving the crypto market and investors in anticipation of the SEC’s definitive stance.
