An announcement appeared on the SEC’s X account on Tuesday, saying the regulator had approved spot bitcoin ETFs. Bitcoin spiked at first, then fell minutes later. The SEC’s account had been “compromised” – the announcement was fake.
What happened exactly? The SEC said the account was compromised briefly by an unknown party after 4 p.m. ET. It posted a message saying the SEC had granted approval for bitcoin ETFs on all registered national securities exchanges and included a picture appearing to quote SEC Chair Gary Gensler. By 4.11 p.m. ET, the post (formerly known as a tweet) had received at least one million views. It was picked up by Reuters and other news media that monitor the SEC’s account. Around twenty minutes later it was no longer visible, appearing to have been deleted.
Context: the SEC is due to make a decision on whether to approve applications to launch spot bitcoin ETFs. More than a dozen asset managers have applications pending with the regulator. If they get approved, analysts say it’ll provide a major boost to the crypto industry, by making it easier for investors to get exposure to bitcoin.
Speaking anonymously to Reuters, executives at some ETF issuers said they were startled and surprised by the initial tweet. One said he was concerned that the SEC might delay or withhold approval for spot bitcoin ETFs as a result of the hack.
X, formerly Twitter, said that the hack was due to an “unidentified individual” obtaining control over a phone number associated with the agency’s account through a third party. It said it’d work with law enforcement to investigate the hack and “related conduct”. X said the hack was not due to any breach of X’s systems.
What happens now? Jan. 10 is still an important date in the process, as the deadline for the SEC to decide on one of the applications. U.S. asset managers still expect spot bitcoin ETFs to be approved today. More on that here.
It’s not known what would happen to bitcoin if or when approval is announced. Some analysts expect bitcoin to spike, but others expect it to be an anti-climax because the news has been expected for so long. Bitcoin peaked at $47,897 on Tuesday and has edged back down since then.
Meanwhile, there’s been something of a fee war emerging, as would-be issuers plan to battle for market share. Various asset managers, including BlackRock and VanEck said that they intend to significantly undercut the average market rate for U.S. ETFs. Here’s a table on who plans to charge what.
