US regulator ‘hack’ causes Bitcoin whiplash

The SEC quickly said its account had been “compromised” and deleted the X post announcing ETF approval

The US Securities and Exchange Commission (SEC) appeared on Tuesday to issue approval for Bitcoin-denominated exchange-traded funds (ETF), sending the value of the cryptocurrency soaring. Within minutes, however, the SEC claimed it had been hacked.

“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,” said the original post on X (formerly Twitter) around 4:11 pm local time. It even included a card with a quote by SEC chairman Gary Gensler, saying that 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 that 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.

A screenshot of the SEC post on X that was later deleted and declared "unauthorized" ©  X/screenshot

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 followup. 

“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,” quipped the finance blog ZeroHedge. 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.