SEC: Bitcoin’s ETF Announcement is False

The U.S. Securities and Exchange Commission (SEC) addressed a misinformed statement regarding bitcoin exchange-traded funds (ETFs) shared on social media, clarifying its inaccuracy. An SEC representative clarified that the tweet pertaining to bitcoin ETF approval did not originate from the SEC or its authorized personnel, highlighting a compromise in the SEC's @SECGov X/Twitter account.

The erroneous social media update falsely claimed the SEC's endorsement of bitcoin ETFs, briefly spiking bitcoin's price before it swiftly receded below $46,000. Subsequently, an SEC spokesperson disclosed that an unknown party briefly gained unauthorized access to the regulator's X account just after 4 p.m. ET on Tuesday, prompting an investigation in collaboration with law enforcement and government partners to address the breach and any associated misconduct.

This incident occurs amidst the imminent decision anticipated this week by the SEC regarding bitcoin ETFs, marking a departure from their historical opposition. Several asset managers, including numerous entities that submitted updated registration statements on Tuesday morning, have filed applications to establish such funds.

The value of the primary cryptocurrency has been steadily rising, partly driven by growing optimism surrounding the potential approval of spot bitcoin ETFs. While bitcoin futures-based funds already trade on U.S. exchanges, proponents of cryptocurrencies argue that the introduction of spot bitcoin funds could attract a different category of investors. ETFs, commonly used by financial advisors, are seen as a means to assuage concerns regarding bitcoin custody complexities, potentially fostering increased crypto investment among hesitant advisors and investors.

Notably, SEC Chair Gary Gensler, known for his opposition to crypto assets during his tenure, previously cautioned investors through social media about the risks associated with crypto-linked products. The SEC's history includes legal actions against significant crypto exchanges under Gensler's leadership.

In a prior legal dispute, the SEC faced a setback against crypto asset manager Grayscale, seeking to convert a bitcoin-holding over-the-counter trust into an ETF. The SEC's decision not to contest this ruling fuelled speculations regarding an imminent approval of bitcoin ETFs.