Hacked Tweet Shakes Market as SEC Denies ETF Approval
By April Fowell
The Securities and Exchange Commission declared on Tuesday that the agency's account was hacked and that a post made from the agency's account on the social media site X announcing the approval of a much-anticipated bitcoin exchange-traded fund was "unauthorized."
After a post on X, formerly known as Twitter, stated that "The SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges," the price of bitcoin briefly surged above $1,000. In anticipation of the approval, cryptocurrency investors had already driven the price of bitcoin above $46,000.
Investing in bitcoin would be possible via an exchange-traded fund (ETF) instead of needing to purchase the digital currency straight on a platform like Coinbase or Binance.
SEC Chairman Gary Gensler, however, called the post unauthorized shortly after it first surfaced and stated on his personal account that the agency's account had been compromised and that "the SEC has not approved the listing and trading of spot bitcoin exchange-traded products." Gensler did not offer any further details.
Cory Klippsten, CEO of Swan Bitcoin, posted on X, saying, "Welp." Klippsten, like many other bitcoin investors, had been hoping that the regulator would authorize bitcoin ETFs this week.
After the illegal post went viral, the price of bitcoin shot up to just about $48,000, then fell to roughly $45,200 following the SEC's decision. At 6:15 p.m., it was trading at about $46,150. ET.
SEC Account Breach: Recovery and Investigation Details
The SEC seemed to have regained control of the account shortly after Gensler's remarks.
The specific method used to breach the SEC's social media account remained unknown. On Tuesday night, X's @Safety account tweeted that the platform had conducted a preliminary investigation and found that "an unidentified individual" had obtained possession of a phone number linked to the account "through a third party."
It stated that two-factor authentication was not enabled on the hacked SEC account, @SecGov, but it did not go into further detail.
Politicians, notably Republicans who have long been critical of Gensler's management of the SEC, voiced their displeasure prior to this revelation, claiming that the agency lacked strong security measures.
Senator Bill Hagerty, a Republican from Tennessee and a member of the Senate Banking Committee, claimed that Congress was entitled to answers about the recent occurrences, just as the SEC would have demanded responsibility from a publicly traded corporation for a major blunder that moved the market.
False information that manipulates the market on the future of bitcoin on regulated exchanges has existed before. Back in October, a fake rumor claimed that money manager BlackRock had received clearance for an ETF that would track bitcoin, which sent values of the cryptocurrency down.