In a dramatic turn of events, the Securities and Exchange Commission (SEC) found itself amid a cybersecurity breach, as its official X social media account was compromised. This breach led to the spread of false information regarding the approval of Bitcoin ETFs, triggering a brief but notable market reaction.
The incident occurred just after the markets closed on Tuesday when the SEC’s X account erroneously announced the approval of Bitcoin ETFs, a decision eagerly awaited by the cryptocurrency market. However, it quickly became evident that this was the work of an imposter, and the misleading tweet was promptly deleted.
SEC chair Gary Gensler took to his X account about 15 minutes after the imposter’s post to clarify the situation. He confirmed that the SEC’s Twitter account was indeed compromised and emphasized that the SEC had not approved the listing and trading of spot Bitcoin exchange-traded products. Gensler’s prompt response helped to dispel the confusion caused by the unauthorized tweet.
The impact of the false announcement was immediate and palpable in the cryptocurrency market. Bitcoin’s price, which reacts sensitively to regulatory news, briefly spiked to $47,897 following the false SEC tweet. However, it then plummeted to as low as $44,903 before stabilizing back above the $45,000 mark.
The anticipation for an official Bitcoin ETF has been a significant driver in the crypto space for several weeks. Various applicants, including notable names like BlackRock, VanEck, ARK 21Shares, and Fidelity, have been detailing the fees they plan to charge if their ETFs receive the green light. With 13 ETF applications currently outstanding, the crypto community has been closely monitoring the SEC’s moves.
Investors have been particularly keyed into the SEC’s decision-making process, as the regulator faces a January 10 deadline to respond to an appeal from ARK 21Shares regarding its Bitcoin ETF application.
This incident not only highlights the influence of regulatory actions on crypto markets but also underscores the importance of cybersecurity in today’s digital age. The swift response from the SEC and Gary Gensler helped to mitigate potential market chaos, yet it serves as a reminder of the vulnerabilities present in our interconnected digital world.