NEW YORK — The Securities and Exchange Commission said Tuesday that a post on the agency’s account on X announcing that the securities regulator had approved the trading of exchange-traded funds holding bitcoin was “unauthorized,” and that the agency’s account had been “compromised.”
The initial announcement brought a brief moment of joy to cryptocurrency investors, who had driven up the price of bitcoin in recent months in anticipation of the approval of a bitcoin ETF. The ETF would provide a a way to invest in bitcoin without having to buy the cryptocurrency outright on a crypto exchange such as Binance or Coinbase.
But soon after the initial post on X appeared, SEC Chairman Gary Gensler said on his personal account that the SEC’s account was compromised and “The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.”
“Welp,” wrote Cory Klippsten, CEO of Swan Bitcoin, on X. Like many bitcoin investors, Klippsten had been expecting the agency to approve bitcoin ETFs potentially as soon as this week.
The price of bitcoin swung from about $46,730 to near $48,000 after the unauthorized post hit, and then dropped to around $45,200 after the SEC’s denial. It was trading slightly above $46,000 at 4:45 p.m.
It was unclear how the SEC’s social media accounts were compromised. Shortly after Gensler’s statement, it appeared that the SEC had gotten control over its account.
Politicians, particularly Republicans who have long expressed frustration at how Gensler operates the SEC, quickly expressed anger at the SEC’s lax security controls over its accounts.
“Just like the SEC would demand accountability from a public company if they made a colossal market-moving mistake, Congress needs answers on what just happened,” said Sen. Bill Hagerty, R-Tennessee, who sits on the Senate Banking Committee.
This is not the first time there has been false market-moving information about the future of bitcoin on regulated exchanges. A false report back in October implied that fund manager BlackRock had gotten approval for bitcoin ETF, causing bitcoin prices to jump sharply.
A spokesman for X did not immediately respond to a request for comment.
