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9 Jan, 2024 23:27

US regulator ‘hack’ causes Bitcoin whiplash

The SEC has said its account was “compromised” and deleted an X post announcing the approval of ETFs
US regulator ‘hack’ causes Bitcoin whiplash

The US Securities and Exchange Commission (SEC) claimed on Tuesday that its apparent approval of Bitcoin-denominated exchange-traded funds (ETF), which sent the value of the cryptocurrency soaring, was the result of a hack.

The original post on X (formerly Twitter) said at around 4:11pm local time “Today the SEC grants approval for Bitcoin ETFs for listing on all registered national securities exchanges. The approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure continued investor protection,”  

It even included a card with a quote by SEC chairman Gary Gensler, saying the approval “enhances market transparency and provides investors with efficient access to digital asset investments within a regulated framework.” 

At 4:26pm, however, Gensler himself posted a message saying the SEC account “was compromised, and an unauthorized tweet was posted.” The regulator “has not approved the listing and trading of spot bitcoin exchange-traded products,” he added.


In response to the original announcement, the price of Bitcoin surged from $46,661 to $47,900, only to crash to $45,419 after Gensler’s follow-up. 

“Total failure of SEC cybersecurity imposes billions of pointless losses on investors,” said psychology professor and crypto observer Geoffrey Miller, noting that the initial spike wiped out people shorting Bitcoin, and the crash wiped out those who used options to go long.

Earlier on Tuesday, Gensler had shared an article by Lori Schock, the SEC’s director of investor education and advocacy, advising investors to be careful about buying “the latest new cryptocurrency or token” because “there are serious risks involved.”

“[These] cartoons can’t even keep their twitter/X account safe,” finance blog Zero Hedge quipped. According to them, as of Tuesday, there were more than a dozen applications for Bitcoin ETFs pending before the SEC, with a January 10 deadline.