The US Securities and Exchange Commission said that they had "not approved the listing of spot bitcoin exchange-traded products".
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The US Securities and Exchange Commission (SEC) said on Tuesday that a post sent from the agency's account on the social media platform X announcing the approval of a long-awaited bitcoin exchange-traded fund (ETF) was "unauthorised," and that the agency's account was hacked.
The price of Bitcoin briefly spiked more than $1,000 (€913) after the post on X, formerly known as Twitter, claimed that the SEC had granted its approval for Bitcoin ETFs.
The US government agency is responsible for maintaining fair markets and protecting investors.
Cryptocurrency investors had already driven Bitcoin's price above $46,000 (€42,000) in anticipation of the approval.
Investors expecting a Bitcoin ETF
An exchange-traded fund (ETF) would provide a way to invest in Bitcoin without having to buy the cryptocurrency outright on a crypto exchange such as Binance or Coinbase.
But soon after the initial post appeared, SEC Chairman Gary Gensler said on his personal account that the SEC's account was compromised and "the SEC has not approved the listing and trading of spot bitcoin exchange-traded products".
Gensler called the post unauthorised without providing further explanation.
"Welp," wrote Cory Klippsten, CEO of Swan Bitcoin, on X. Like many Bitcoin investors, Klippsten had been expecting the agency to approve Bitcoin ETFs potentially as soon as this week.
The price of Bitcoin swung from about $46,730 (€42,673) to just below $48,000 (€43,832) after the unauthorised post hit and then dropped to around $45,200 (€41,275) after the SEC's denial.
SEC’s account did not have two-factor authentication, X claims
Shortly after Gensler’s statement, it appeared that the SEC had gotten back control over the account.
It was unclear exactly how the SEC's social media account was hacked. X's @Safety account tweeted on Tuesday night that a preliminary investigation by the platform determined “an unidentified individual” got control of a phone number associated with the account “through a third party.”
It did not elaborate, though it did say that the compromised SEC account, @SecGov, did not have two-factor authentication activated.
This is not the first time there has been false market-moving information about the future of Bitcoin on regulated exchanges.
A false report back in October implied that fund manager BlackRock had gotten approval for bitcoin ETF, causing bitcoin prices to jump sharply.
Elon Musk gutted Twitter’s content moderation and security teams after taking over the platform in late 2022.
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And while internet watchdog groups have complained about a spike in toxic content, including antisemitic and other hate speech on X, many also worry about account integrity.
"The consequences of account takeovers could potentially be significant, and especially during an election year," said Brett Callow, an analyst with the cybersecurity firm Emsisoft.
