The U.S. Securities and Exchange Commission (SEC) has recently denied rumors of approving Bitcoin exchange-traded funds (ETFs) after a false announcement on social media. The SEC clarified that its official Twitter account had been compromised, and the tweet regarding the approval of Bitcoin ETFs was unauthorized.
Unauthorized Social Media Post
On Tuesday, the SEC stated that a tweet claiming the approval of Bitcoin ETFs was fraudulent. The false announcement had caused a brief spike in Bitcoin’s price before quickly sliding below $46,000. The SEC confirmed that the tweet did not originate from the SEC or its staff members.
In a subsequent statement, the SEC revealed that there had been unauthorized access to its social media account. The breach occurred for a short period, and the agency is working with law enforcement and government partners to investigate the matter and determine the appropriate course of action. The SEC is taking the incident seriously and will address both the unauthorized access and any related misconduct.
The SEC is expected to make a decision on Bitcoin ETFs this week, marking a significant milestone after years of opposition. Over a dozen asset managers have filed applications to create Bitcoin ETFs, and updated registration statements were submitted earlier that morning. The anticipation of Bitcoin ETF approval has contributed to the recent surge in Bitcoin’s price.
Crypto advocates argue that the launch of spot Bitcoin ETFs could attract a new category of investors to digital assets. By offering a regulatory wrapper through ETFs, financial advisors and investors who have been hesitant about Bitcoin’s custody complexity may become more willing and able to enter the crypto market. ETFs are a familiar and commonly used financial instrument among advisors.
SEC Chair Gary Gensler has been notably critical of cryptocurrencies throughout his tenure. The commission has taken legal action against several major crypto exchanges under his leadership. Earlier in the week, Gensler took to social media to caution investors about the risks associated with crypto-related products. His stance has created speculation and uncertainty regarding the SEC’s approach to Bitcoin ETFs.
The SEC faced a setback last year when it lost a court case against crypto asset manager Grayscale. Grayscale sought to convert its over-the-counter trust holding Bitcoin into an ETF. The SEC decided not to appeal the ruling, leading to conjecture that Bitcoin ETF approvals might be imminent. However, with the recent social media hack, the SEC’s position regarding Bitcoin ETFs remains uncertain.
The SEC’s denial of approving Bitcoin ETFs following the social media hack has cast further doubt on the agency’s stance towards cryptocurrencies. The incident highlights the vulnerability of official accounts to unauthorized access, underlining the importance of robust security measures. As the market eagerly awaits the SEC’s decision on Bitcoin ETFs, uncertainty persists, impacting Bitcoin’s price and the hopes of many asset managers and investors.
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