- The US Securities and Exchange Commission (SEC) faced criticism after a false post on its social media account led to confusion over the approval of spot Bitcoin ETFs.
- Bloomberg analyst Eric Balchunas and others suggested the possibility of internal errors at the SEC, while the crypto market experienced significant price volatility following the false announcement.
Controversy Surrounds SEC’s False Bitcoin ETF Announcement
The US Securities and Exchange Commission (SEC) has come under fire following a controversial post on its social media account that falsely indicated the approval of spot Bitcoin exchange-traded funds (ETFs).
Accusations and Speculations Arise
Senior Bloomberg ETF analyst Eric Balchunas raised doubts over the SEC’s explanation for the erroneous post, suggesting it might have been a mis-scheduled tweet intended for a later date. This theory aligns with the SEC’s deadline for approving spot Bitcoin products set for December 10, while the post appeared a day earlier.
SEC’s Cybersecurity Under Scrutiny
The incident has drawn attention to the SEC’s cybersecurity practices, as X, the social media platform, acknowledged that the SEC’s account was compromised due to a disabled two-factor authentication. An unidentified individual reportedly gained access to the account through a third-party linked phone number.
Diverse Reactions from Industry Leaders
The scenario has sparked various reactions, with former White House communications director Anthony Scaramucci openly accusing SEC Chair Gary Gensler of dishonesty. Scaramucci suggested that the news might have been prematurely shared by an SEC staff member, pointing to potential internal mismanagement.
Market Impact of the False Announcement
The crypto market quickly felt the repercussions of the SEC’s blunder. Bitcoin (BTC) experienced a significant price surge to a 19-month high of $47,900, only to plummet to $45,100 following Gensler’s clarification that the approval news was false. At the time of writing, Bitcoin’s price stood at $45,807, reflecting a drop of over 2% in the past 24 hours.
Ongoing ETF Approval Saga
Amidst this turmoil, several companies, including industry giants like BlackRock, Fidelity, and Grayscale, await the SEC’s decision on their applications to launch spot Bitcoin ETFs. The crypto community is particularly focused on the pending decision on the joint Bitcoin ETF proposal by Ark Invest and 21Shares, expected around December 10.
The incident involving the SEC’s mistaken announcement regarding Bitcoin ETF approval has not only caused market volatility but also raised serious concerns about the SEC’s communication protocols and cybersecurity measures. As the crypto industry continues to grow, the need for clear and accurate regulatory communications becomes increasingly vital.