The United States Securities and Exchange Commission (SEC) has not yet given approval for a spot Bitcoin (BTC) exchange-traded fund (ETF).
On Jan. 9, the regulator said its X (formerly Twitter) account was compromised, leading to a false tweet suggesting that Bitcoin ETFs had been approved in the United States. The offending tweet was up for approximately 20 minutes before being taken down.
Various news outlets — including Cointelegraph, Blockworks and Reuters — initially reported on the tweet from the SEC. SEC Chair Gary Gensler tweeted 15 minutes later, revealing that the SEC’s account had been compromised.
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
The incident caused the price of Bitcoin to surge roughly 2.5% to $47,901 before dropping roughly 7% to $44,701. Meanwhile, crypto X is continuing to speculate what this could mean for the SEC and anticipated Bitcoin ETF approvals.
Here’s a wrap-up of what has happened since:
SEC denies staff caused “unauthorized” post, but others skeptical
The regulator told Cointelegraph that its staff did not have any involvement in posting the “unauthorized” tweet.
“The SEC’s @SECGov X/Twitter account has been compromised. The unauthorized tweet regarding bitcoin ETFs was not made by the SEC or its staff.”
However, some community members don’t believe that and think it was simply a premature announcement — likely drafted and then sent out by mistake. They have tied this theory to the wording and construction of the post, which uses similar language that the SEC is known for.
Others noted that certain elements of the post, such as the use of the Bitcoin hashtag and icon, liking posts other than SEC affiliated accounts, as well as the use of the word “Chair” to describe Gary Gensler’s position at the SEC, indicate the post was not made by SEC staff.
Lawyers and politicians call for investigation of SEC
Several United States lawyers and senators have called on Congress to demand an investigation into the securities regulator after the debacle.
“Just like the SEC would demand accountability from a public company if they made such a colossal market-moving mistake, Congress needs answers on what just happened. This is unacceptable,” said U.S. Senator Bill Hagerty in a Jan. 9 X post.
U.S. Senator Cynthia Lummis also demanded the SEC offer some transparency into the events that led to the false post.
Fraudulent announcements, like the one that was made on the SEC’s social media, can manipulate markets. We need transparency on what happened.
— Senator Cynthia Lummis (@SenLummis) January 9, 2024
U.S. Senators J.D. Vance and Thom Tillis have also sent a letter to Gary Gensler demanding answers regarding the incident.
SEC to work with law enforcement to investigate hack
The SEC says it will work with law enforcement to investigate the recent unauthorized access to its X account and has confirmed that the unauthorized access has been terminated.
X has since confirmed that the SEC's account was compromised due to an “unidentified individual obtaining control over a phone number associated with the @SECGov account through a third party.” It also confirmed the account did not have two-factor authentication enabled at the time it was compromised.
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…
— Safety (@Safety) January 10, 2024
The initial post had at least 4.4 million views before it was taken down.
Bitcoin ETF decision unlikely to be delayed, say commentators
Meanwhile, crypto industry observers don’t expect the recent X debacle to cause a delay in a spot Bitcoin ETF decision, which has been widely expected to come on Jan. 10.
Some note, however, that it is still a possibility.
“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,” said Dennis Porter, CEO of Satoshi Action Fund, in a note to Cointelegraph.
Fwiw, at least one prospective spot bitcoin ETF issuer is concerned SEC “hack” could result in approval delay…
— Nate Geraci (@NateGeraci) January 10, 2024
My take? There’s a *hard* deadline tomorrow. All indications point toward approval.
There’s a regulatory process to follow here. That doesn’t involve X.
via @Reuters pic.twitter.com/O1hiV2mI4z
Porter noted that his contacts still indicate the Securities and Exchange Commission will give the green light to the spot Bitcoin ETF applicants on Jan. 10.
“Anything is possible, but I find [it] to be extremely unlikely [that] they aren’t going to approve or reject based on this incident,” added U.S. attorney and commercial litigator Joe Carlasare.
Bloomberg ETF analyst Eric Balchunas said he’s still anticipating official approval of the spot Bitcoin ETFs sometime between 4:00 pm to 5:00 pm Eastern Time (9:00 pm to 10:00 pm UTC) on Jan. 10.
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Update (Jan. 10 at 3:37 am UTC): This article has been updated to include a post from @safety on X, sharing the results of its preliminary investigation.
Update (Jan. 10 at 5:28 am UTC): The article has been further updated to include information about a letter sent from two U.S. senators to Gary Gensler.