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SEC Account Hack Misleads Investors with Bogus Bitcoin ETF Approval

In a major cybersecurity breach, the US Securities and Exchange Commission’s (SEC) official X account was hacked, falsely claiming the approval of Bitcoin ETFs and causing a sharp plunge in Bitcoin prices.

 Fake Post Claims Bitcoin ETF Approval

SEC Chair Gary Gensler addressed the situation, clarifying that the SEC’s X account had indeed been compromised, and the tweet was not legitimate.

Gensler emphasized that the SEC had not granted approval for the listing and trading of spot Bitcoin ETFs. Gensler stated, “The SEC Twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.”

This incident occurred at a critical juncture as the crypto community eagerly awaited the SEC’s decision on the pending Bitcoin ETF applications. The industry had anticipated that the SEC would provide an answer by Wednesday, which coincided with the predicted deadline. The outcome could result in either rejection, approval, or further delays.


Bitcoin ETF Controversy

What makes the situation intriguing is that the “compromised” SEC account’s tweet mentioned the approval of Bitcoin ETFs for listing on all registered national securities exchanges. This false announcement sent shockwaves through the cryptocurrency markets, leading to a sudden and significant fluctuation in Bitcoin’s value.

The incident raises questions about cybersecurity measures at major regulatory bodies and the impact of social media on financial markets.

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With the growing influence of digital platforms in shaping investor perceptions and market trends, this breach serves as a stark reminder of the need for robust security protocols and swift corrective measures in the event of such breaches.

Unprecedented Twists in Bitcoin ETF Journey

In response to the turmoil, Coinbase Chief Legal Officer Paul Grewal expressed his frustration, metaphorically stating that he was “biting my tongue so hard it’s bleeding…” The incident comes amid an ongoing legal struggle between Coinbase and the SEC, centered around demands for clearer regulation of cryptocurrencies. 

Coinbase, a pivotal player in the crypto market, has been at the forefront of advocating for definitive regulatory guidelines, especially as its custody service plays a crucial role in numerous spot Bitcoin ETF applications.

This latest episode in the Bitcoin ETF saga has been perceived as a significant turning point. Nate Geraci, president of The ETF Store, compared the unfolding events to a “Quentin Tarantino-esque” plot twist, emphasizing the dramatic and unprecedented nature of this development. He reflected on the more than a decade-long journey to launch a spot Bitcoin ETF, suggesting that this incident could be the most impactful yet in this ongoing narrative.

Skepticism and Reminders Amidst SEC Hack Incident

Anthony Scaramucci, former White House communications director and now founding and managing partner at SkyBridge Capital, expressed skepticism over the alleged hack. Scaramucci posited an alternative theory, suggesting that the tweet might have been a legitimate post released prematurely.

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This perspective introduces a different angle to the incident, implying potential internal errors rather than external cybersecurity threats.

However, this theory faced immediate pushback, with several observers highlighting the improbability of the SEC using a casual hashtag like #bitcoin in an official announcement of such significance. The use of such informal language in a high-stakes communication is uncharacteristic of the SEC, adding to the doubts about the authenticity of the tweet.

Amidst these discussions, past statements from the SEC resurfaced, garnering attention. One notable post from October cautioned, “Careful what you read on the internet. The best source of information about the SEC is the SEC.” This earlier advice seemed almost prophetic in the context of the current confusion and misinformation.

Furthermore, Gensler’s previous advice on securing financial accounts and protecting against identity theft and fraud also gained renewed relevance.

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Donald Haymatter

Donald Haymatter is an expert broker with 15+ years of experience. He stays up-to-date with the latest financial news and trends to help clients make informed investment decisions. Donald is known for his analytical approach and personalized investment advice. Outside of work, he enjoys reading and mentoring young professionals.

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