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SEC's X account hacked, sparking uproar over Bitcoin ETF

SEC's X account hacked, sparking uproar over Bitcoin ETF

The cryptocurrency industry was euphoric for 15 minutes.

At 4:11 p.m. Tuesday, the Securities and Exchange Commission's official Coinbase, a huge crypto exchange, posted a celebratory banner, Crypto fans called it a historic day for the industry.

Then at 4:26 p.m., SEC Chairman Gary Gensler, Posted That the agency's account was compromised, resulting in an “unauthorized tweet”. An SEC spokesperson confirmed the hack in an emailed statement.

The security breach was the latest twist in the crypto industry's years-long pursuit of an investment vehicle known as an exchange traded fund tied to the price of Bitcoin. Since the fall, crypto enthusiasts have been counting down the days until the January 10 deadline for the SEC to decide whether or not to allow Bitcoin ETFs. The price of Bitcoin has surged more than 60 percent in recent months, driven by growing optimism that approval was imminent. ,

An announcement this week was widely expected, with major financial companies like BlackRock and Fidelity set to launch Bitcoin products. On social media, speculation about the exact timing of approval has run rampant, inspiring memes about the once obscure SEC processes and propelled ETF analysts to online stardom.

But the industry will have to wait.

“The SEC has not approved the listing and trading of spot Bitcoin exchange-traded products,” Mr. Gensler wrote in his post.

An ETF is a basket of assets consisting of shares traded on traditional exchanges such as the Nasdaq. Investors in a Bitcoin ETF will own a portion of a basket containing Bitcoin, allowing them to avoid some of the risks and inconveniences associated with purchasing the cryptocurrency directly.

Crypto enthusiasts have long hoped that the approval of the financial product would bring billions of dollars of new investment into the industry, attracting wealth managers who in the past were hesitant to put clients' money into crypto.

For years, the SEC resisted the industry's pleading, arguing that the crypto market was ripe for manipulation. But in August, the agency lost a legal battle with one of the companies hoping to offer a Bitcoin fund, clearing the way for its approval.

That legal victory was a rare bright spot in a bleak period for the crypto industry. Since mid-2022, crypto prices have fallen, and several major companies have filed for bankruptcy, leading to criminal prosecution. Mr Gensler has led a campaign against the industry by filing lawsuits against major companies such as Coinbase and its biggest international rival, Binance.

So when the social media post on the SEC's official X account was published Tuesday afternoon, the crypto industry was ready to celebrate. A brief description appeared above Mr. Gensler's thumbnail image.

“Today the SEC approved Bitcoin ETFs for listing on all registered national securities exchanges,” the post said. “Approved Bitcoin ETFs will be subject to ongoing monitoring and compliance measures to ensure continued investor protection.”

The price of Bitcoin briefly rose to around $48,000 after the SEC announced the hack, before falling back to around $45,000.



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