The U.S. Securities and Exchange Commission (SEC) said on Tuesday that someone posted a fake message on its social media account on platform X, claiming that it had given the much-anticipated approval for spot bitcoin exchange traded funds.
The regulator has not yet approved spot bitcoin ETFs, an SEC spokesperson said, adding that the agency’s account had been compromised. The spokesperson did not provide additional details.
The unauthorized post on X, formerly known as Twitter, said that the SEC had granted approval for bitcoin ETFs on all registered national securities exchanges and included a picture purporting to quote SEC chair Gary Gensler. The post was picked up by Reuters and other news media that monitor the SEC’s account. The price of bitcoin jumped after the post.
The posting came as the SEC was widely expected on Wednesday to finally approve a batch of ETFs that track the price of bitcoin, in a potential watershed moment for the crypto industry. The unauthorized post surprised the industry, with insiders scrambling to find out whether it was true and why the SEC would first publish something on social media.
Executives from some ETF issuers, speaking on condition of anonymity because of the sensitivity of the matter, said they were startled and surprised by the initial tweet.
One executive said he was “concerned” that the SEC might delay or withhold approval for spot bitcoin ETFs as a result of the hack.
Anthony Tu-Sekine, a lawyer with Seward & Kissel, said he did not believe the incident would change the likelihood of approvals at this late stage.
Mr. Tu-Sekine said it was not clear why someone would do something like that when the approval was already widely expected. “This is really puzzling,” Mr. Tu-Sekine said.
By 4:11 p.m., the post on the SEC’s X account had received at least one million views. Fewer than 20 minutes later, it was no longer visible and appeared to have been deleted.
The price of bitcoin shot up to around $48,000 on the fake post, before falling to below $45,000 minutes later. It was last down 3.15 per cent at $45,513 after the SEC deleted and disavowed the information. Some analysts had expected bitcoin to fall on the ETF approvals, after gaining more than 70 per cent in recent months on the expectation of a greenlight.
The SEC declined to say whether authorities have begun to investigate the compromise or whether the incident will affect potential approvals. The SEC has previously rejected all spot bitcoin ETF proposals over fears of market manipulation.
Accounts on X – like accounts on other social media platforms – are sometimes hijacked by stealing passwords or tricking targets into giving up their login credentials.
Accounts can also be hijacked by compromising the social media platform itself. In 2020, for example, a teenage hacker and his friends broke into X’s internal computer network and seized control of dozens of high-profile accounts, using the access to promote a cryptocurrency scam.
Accounts belonging to Barack Obama, Kim Kardashian, Jeff Bezos and Elon Musk were among those affected at the time.
A spokesperson for X did not immediately respond to a request for comment.