SEC Denies Bitcoin ETF Approval Following Alleged Hack of Social Media Account

In an unexpected turn of events, the U.S. Securities and Exchange Commission (SEC) announced on social platform X (formerly Twitter) that it had granted approval for Bitcoin exchange-traded funds (ETFs) to be listed on all registered national securities exchanges. This triggered a surge in Bitcoin prices, reaching above $46,000, as cryptocurrency investors anticipated the long-awaited approval.

However, SEC Chairman Gary Gensler later clarified on his personal account that the SEC's social media account had been hacked, and the announcement was unauthorized. He explicitly stated that the SEC had not approved the listing and trading of spot Bitcoin exchange-traded products. The cryptocurrency market experienced a rapid reversal, with Bitcoin's price initially spiking and then dropping to around $45,200 after the SEC's denial.

Investors and industry participants had been anticipating the SEC's decision on Bitcoin ETFs, with expectations running high for a potential approval. The incident highlights the vulnerability of social media platforms to misinformation and unauthorized access, impacting financial markets. Questions have arisen regarding the SEC's account security controls, prompting calls for accountability from politicians, particularly those critical of Gensler's leadership at the SEC.

This incident recalls a similar situation in October, where false information about BlackRock gaining approval for a Bitcoin ETF caused significant market movement. The SEC's prompt response and clarification underscore the challenges regulators face in managing information dissemination on digital platforms. The focus on account integrity and security becomes crucial in preventing such incidents that can influence market behavior.