• 25 June, 2024
News

SEC to Investigate Compromised X Account Amidst Bitcoin ETF Issues

The cryptocurrency market saw significant volatility following a misleading post on the U.S. Securities and Exchange Commission’s (SEC) official X account. The post announced the approval of spot Bitcoin exchange-traded funds (ETFs), causing an immediate surge in Bitcoin’s value from $46,729 to a peak of $47,901.

However, the price rally was short-lived. Just 15 minutes later, SEC Chair Gary Gensler contradicted the announcement, clarifying that the commission had “not approved the listing and trading of spot bitcoin exchange-traded products.” The price of Bitcoin subsequently fell to around $44,701.

The unauthorized post included a photo and a fabricated quote attributed to Gensler. Later, X’s investigation revealed that the SEC’s account was comromised due to unauthorized access to a phone number linked to the @SECGov account and not a breach of X’s systems. The SEC’s account reportedly did not have two-factor authentication enabled at the time of the breach.

Despite the retracted post, the possibility of the SEC approving a spot Bitcoin ETF remains open. The market is eagerly anticipating a decision on applications from several asset managers, including ARK Invest and 21Shares. Some on social media even speculated that the information in the retracted SEC tweet was accurate but released prematurely.

Following the incident, the market witnessed over $50 million worth of liquidated derivatives trading positions on cryptocurrency exchanges within an hour. Bitcoin’s price underwent rapid changes, eventually settling near $46k.

SEC Chair Gary Gensler, known for his active stance on crypto regulation, has previously taken legal actions against major crypto exchanges. This incident has raised questions about the integrity and security of official communication channels in the digital age, particularly as they relate to sensitive financial information. As the SEC investigates the matter with law enforcement, the cryptocurrency market remains watchful of the evolving regulatory landscape.

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