SEC's X Account Hacked to Falsely Say Bitcoin ETF Approved

“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

The SEC didn’t immediately respond to an emailed message sent outside regular business hours seeking comment on X’s initial assessment.

Meanwhile, Republican Senators JD Vance and Thom Tillis in a letter demanded an explanation for the SEC’s “errant” post. They are seeking a briefing by the SEC and answers to questions no later than Jan. 23.

Decision Due

About a dozen companies have applied to list ETFs backed by Bitcoin in the U.S.

The SEC has until Jan. 10 to take action on at least one of those applications, and crypto insiders have speculated the regulator will use that date to announce a slew of decisions at once.

There are two technical requirements that must be fulfilled before a spot-backed Bitcoin ETF can start trading.

First, the SEC must sign off on so-called 19b-4 filings by the exchanges that would list the ETFs. Second, the regulator must approve the relevant S-1 forms, which are the registration applications from the would-be issuers — a list that includes BlackRock Inc. and Fidelity.

The SEC is planning to vote on the exchanges’ filings, the 19b-4s, this week, Bloomberg News has reported. The regulator may or may not take action on the issuers’ applications, the S-1s, around the same time.

If the SEC grants both sets of required approvals, the ETFs could start trading as soon as the next business day.

ETF Controversy

The SEC under Gensler and his Trump-era predecessor, Jay Clayton, has previously refused to allow such a product to launch, citing concerns about investor protection and the potential for market manipulation.

However, speculation has been mounting since August, when the SEC lost a key legal fight against crypto asset manager Grayscale Investments, that the regulator will have to acquiesce to the growing clamor for the product.

Hype about an approval has been rampant on social media. Bitcoin surged as much as 10% on Oct. 16 when a crypto news site incorrectly posted on X that BlackRock had been approved to list a spot ETF.

About $85 million of mostly bearish trading positions were liquidated during the surge, which quickly reversed.

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