The US Securities and Exchange Commission says that a post sent from its account on the social platform X announcing the approval of a long-awaited bitcoin exchange-traded fund was “unauthorised,” and that the agency’s account was hacked.
The price of bitcoin briefly spiked more than US$1000 (NZ$1600) after the post on X, formerly known as Twitter, 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 US$46,000 (NZ$74,000) in anticipation of the approval.
An ETF would provide a way to invest in bitcoin without having to buy the cryptocurrency outright on a crypto exchange such as Binance or Coinbase.
But soon after the initial post appeared, SEC Chairperson Gary Gensler said on his personal account that the SEC’s account was compromised and, “The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.” Gensler called the post unauthorised without providing further explanation.
“Welp,” wrote Cory Klippsten, CEO of Swan Bitcoin, on X. Like many bitcoin investors, Klippsten had been expecting the agency to approve bitcoin ETFs potentially as soon as this week.
The price of bitcoin swung from about US$46,730 to just below US$48,000 after the unauthorised post hit, and then dropped to around US$45,200 after the SEC’s denial.
It was unclear how the SEC’s social media account was hacked. Shortly after Gensler’s statement, 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 Senator Bill Hagerty, Republican-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 bitcoin ETF, causing bitcoin prices to jump sharply.
A spokesperson for X did not immediately respond to a request for comment.