Bitcoin swings sharply after false claim that SEC approved ETFs

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Cryptocurrency prices swung sharply on Tuesday after a false post on the US Securities and Exchange Commission's official

The fake post announced just after 4pm Washington time that the SEC “grants approval for #Bitcoin ETFs to be listed on all registered national securities exchanges.” It was immediately picked up on social media, business news sites and Bloomberg TV.

A little more than 10 minutes later, the SEC chairman poured cold water on the announcement. Gary Gensler posted on his personal X account: “@SECGov Twitter account was hacked and an unauthorized tweet was posted. The Securities and Exchange Commission (SEC) has not approved the listing and trading of exchange-traded products on a Bitcoin spot exchange.”

An SEC spokeswoman said the original post “did not come from the SEC or its employees.” By 5 p.m., SEC staff had regained control of X's account and the false post had been deleted.

“The SEC will work with law enforcement and our partners across government to investigate the matter and determine appropriate next steps related to both the unauthorized access and any related misconduct,” the SEC said, attributing the unauthorized access to “an unknown party.” “.

Bitcoin rose immediately after the post, gaining 1.5 percent on the day, but quickly reversed after the news was confirmed to be fake and the price fell by as much as 3.4 percent.

“The account is secure and we are investigating the root cause,” said Joe Benarroch, head of business operations at X.

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Cryptocurrency enthusiasts are on alert as the Securities and Exchange Commission is expected to decide later this week whether to approve bitcoin ETFs, in what could be a watershed moment for the digital asset.

At least 11 asset managers have applications pending before the SEC to launch spot bitcoin ETFs. The SEC faces a Wednesday deadline to approve some of the requests.

Although the watchdog has previously resisted such products, it now has less room to manoeuvre. A federal appeals court ruled last year that the SEC's denial of Grayscale's request to transfer its $29 billion bitcoin trust into such an exchange-traded fund was “arbitrary and capricious.”

So far this year, the volatile cryptocurrency has risen about 7 percent on hopes the Securities and Exchange Commission will grant approval.

Several applicants said they received feedback from commission staff indicating approval was possible this week.

Applicants range from large asset managers BlackRock, Invesco and Franklin Templeton to smaller firms such as Ark Investment Management and Bitwise. Earlier this week, companies revealed their potential product fees, with many aspiring companies either dramatically reducing their fees or agreeing to waive them entirely shortly after they were created.

The SEC has long argued that spot bitcoin ETFs cannot guarantee the same level of protection for investors as traditional investment products. Gensler posted Monday a Short thread On

ETFs hold assets like mutual funds but trade on exchanges like stocks and typically enjoy favorable tax treatment in the United States. All of the outstanding ETFs aim to invest only in Bitcoin, which is an evolution compared to previous products that invest in cryptocurrency futures or companies involved in the cryptocurrency industry.

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Additional reporting by Hannah Murphy

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