The Truth About Bitcoin Spot ETF Approval: Unraveling The SEC’s Twitter Debacle

The anticipation surrounding the approval of a spot Bitcoin exchange-traded fund (ETF) in the United States took an unexpected turn on Jan. 9 when the U.S. Securities and Exchange Commission (SEC) faced a Twitter controversy. The SEC’s X account, formerly on Twitter, posted a tweet falsely announcing the approval of Bitcoin ETFs, causing a brief market frenzy.

SEC’s Twitter Hack and Market Impact

The @SECGov twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.

— Gary Gensler (@GaryGensler) January 9, 2024

SEC Chair Gary Gensler clarified that the tweet was unauthorized, attributing it to a compromise of the SEC’s X account. The misleading post triggered a 2.5% surge in Bitcoin’s price to $47,901, only to plummet 7% to $44,701 after the clarification. The incident left the crypto community speculating about the implications for the SEC’s credibility and the impending Bitcoin ETF decision.

Calls for Investigation

The fallout didn’t end with market fluctuations; lawyers and senators called for a congressional investigation into the SEC’s handling of the situation. Questions arose about whether the tweet was a genuine mistake or a premature announcement, leading to demands for transparency and accountability from various quarters.

Fraudulent announcements, like the one that was made on the SEC’s social media, can manipulate markets. We need transparency on what happened.

— Senator Cynthia Lummis (@SenLummis) January 9, 2024

SEC’s Response and Investigation

The SEC pledged to collaborate with law enforcement to investigate the unauthorized access to its X account. The SEC confirmed the termination of the unauthorized access and revealed that it occurred due to an individual gaining control over a phone number associated with the @SECGov account through a third party.

We can confirm that the account @SECGov was compromised and we have completed a preliminary investigation. Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number…

— Safety (@Safety) January 10, 2024

Impact on Bitcoin ETF Decision

Despite the Twitter debacle, industry observers generally believe that the incident is unlikely to cause a delay in the spot Bitcoin ETF decision expected on Jan. 10. While some express caution, noting the SEC’s potential use of the situation to extend the decision timeline, others remain optimistic about the approval.

Dennis Porter, CEO of Satoshi Action Fund, remains confident in the green light for spot Bitcoin ETFs on Jan. 10, emphasizing that a delay seems highly improbable. Bloomberg ETF analyst Eric Balchunas echoes this sentiment, anticipating official approval between 4:00 pm to 5:00 pm Eastern Time (9:00 pm to 10:00 pm UTC) on Jan. 10.

Reference: Cointelegraph

Conclusion

The SEC’s Twitter incident injected unexpected drama into the Bitcoin ETF saga, prompting calls for investigation and raising concerns about market manipulation. As the cryptocurrency community awaits the official decision on spot Bitcoin ETFs, the episode serves as a reminder of the delicate balance between regulatory processes and the volatile nature of the crypto market.

In summary, the SEC’s Twitter misstep has added a layer of uncertainty to the already eagerly awaited Bitcoin spot ETF approval. While calls for investigation persist, industry insiders remain cautiously optimistic about the regulatory decision, emphasizing the need for vigilance in a rapidly evolving crypto landscape.