SEC says ‘compromised’ account to blame for tweet approving Bitcoin ETF
The Securities and Exchange Commission (SEC) said Tuesday that a post sent from the agency’s account on the social platform X/Twitter announcing the approval of a long-awaited bitcoin exchange-traded fund was “unauthorized”, and that the agency’s account had been “compromised”.
The price of bitcoin briefly spiked more than $1,000 after the post on X claimed: “The SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges.” Cryptocurrency investors had already driven bitcoin’s price above $46,000 in anticipation of the approval.
An ETF would have provided a way to invest in bitcoin without having to buy the cryptocurrency outright on a crypto exchange such as Binance or Coinbase.
Soon after the initial post appeared, the SEC chair, Gary Gensler, said on his personal account that the SEC’s account had been compromised and that “the SEC has not approved the listing and trading of spot bitcoin exchangetraded products”. Gensler called the post unauthorized without providing further explanation.
X confirmed the SEC’s account was compromised and said it was because of an “unidentified individual” obtaining control over a phone number associated with the agency’s account through a third party.
The Elon Musk-owned platform also said late on Tuesday that the SEC did not have two-factor authentication enabled at the time the account was compromised and the hack was not due to any breach of X’s systems, citing a preliminary investigation.
The price of bitcoin swung from about $46,730 to just below $48,000 after the unauthorized post hit, and then dropped to around $45,200 after the SEC’s denial. It was trading at around $46,150 at 6.15pm ET.
“Welp,” Cory Klippsten, the CEO of Swan Bitcoin, wrote earlier on X. Like many bitcoin investors, Klippsten had been expecting the agency to approve bitcoin ETFs potentially as soon as this week.
It was unclear how the SEC’s social media account had been compromised.
Shortly after Gensler’s statement went live, it appeared that the SEC had gotten control over the account.
Politicians, particularly Republicans who have long expressed frustration at how Gensler operates the SEC, quickly expressed anger at the SEC’s lax security controls over its accounts.
“Just like the SEC would demand accountability from a public company if they made a colossal market-moving mistake, Congress needs answers on what just happened,” said the Republican senator Bill Hagerty of Tennessee, who sits on the Senate banking committee.
This is not the first time there has been false market-moving information about the future of bitcoin on regulated exchanges. A false report back in October implied that fund manager BlackRock had gotten approval for a bitcoin ETF, causing bitcoin prices to jump sharply.