On Tuesday, Bitcoin experienced a brief surge following a post on the U.S. market regulator’s X account (previously known as Twitter), which claimed that new cryptocurrency exchange-traded funds (ETFs) had been approved.
However, the Securities and Exchange Commission (SEC) later removed the post, stating that their account had been “compromised”. The social media platform clarified that the compromised account was not the result of a system breach.
An announcement regarding the new ETFs is anticipated from U.S. regulators this week.
The misleading post surfaced on the SEC’s official X account just after 16:00 Washington time (21:00 GMT). It stated that the regulator had “granted approval for #Bitcoin ETFs to be listed on all registered national securities exchanges”.
The post was quickly noticed and quoted by social media users and business news outlets.
Within minutes, Gary Gensler, the chair of the SEC, refuted the false announcement on his personal X account: “The @SECGov 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.”
An SEC spokesperson informed the BBC that “there was unauthorized access to and activity on the @SECGov x.com account by an unknown party for a brief period of time shortly after 4 pm ET”. They added that “the unauthorized access has been terminated” and that “the SEC will collaborate with law enforcement and government partners to investigate the incident and determine the next steps regarding the unauthorized access and any related misconduct.”
Later on Tuesday, X confirmed that it had conducted a preliminary investigation into the false post on the SEC’s account and found that it was not due to a breach of the social media platform’s systems.
X stated, “We can confirm that the account @SECGov was compromised and we have completed a preliminary investigation.” They added, “Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual gaining control over a phone number associated with the @SECGov account through a third party.” They also confirmed that “the account did not have two-factor authentication enabled at the time the account was compromised.”
Bitcoin’s value briefly rose to nearly $48,000 (£37,800) immediately after the false post before dropping back to around $46,000.
Investors are eagerly awaiting an SEC announcement on the potential approval of spot bitcoin ETFs, expected this week. This would represent a significant milestone for the cryptocurrency market in its journey towards mainstream financial market acceptance.
Several asset management firms have submitted applications for SEC approval for spot Bitcoin ETFs.
ETFs are portfolios that enable investors to speculate on multiple assets without having to purchase them directly. They are traded on stock exchanges like shares, and their value is dependent on the real-time performance of the overall portfolio.
While some ETFs already indirectly include Bitcoin, a spot Bitcoin ETF would purchase the cryptocurrency directly, or “on the spot”, at its current price, throughout the day.