The U.S. Securities and Exchange Commission (SEC) recently clarified that an announcement regarding the approval of bitcoin exchange-traded funds (ETFs) on social media was false. According to the SEC, their official Twitter account was compromised, and the unauthorized tweet regarding bitcoin ETFs did not originate from the commission or its staff. This incident caused a brief spike in bitcoin’s price before plummeting below $46,000. The SEC confirmed that there had been unauthorized access to their account and vowed to investigate the matter.
The SEC spokesperson clarified that the agency did not approve bitcoin ETFs for trading, contradicting the false information shared on social media. The regulator emphasized that the tweet was not an official statement, and they will work with law enforcement agencies to identify the unknown party responsible for the security breach. Additionally, the SEC will determine appropriate actions to address the unauthorized access and any associated misconduct.
After years of opposing bitcoin ETFs, the SEC is expected to make a decision on their approval this week. Numerous asset managers have submitted applications to create these funds, with many updating their registration statements on Tuesday morning. The price of bitcoin has been steadily increasing in recent months due to rising optimism surrounding the potential approval of spot bitcoin ETFs. Presently, bitcoin futures funds are available for trading on U.S. exchanges. Advocates believe that the launch of spot bitcoin ETFs will attract a new wave of investors to the digital asset market.
Exchange-traded funds (ETFs) are widely used financial instruments by advisors and investors. By providing a regulated investment vehicle, ETFs offer a more accessible and secure way for individuals to gain exposure to bitcoin and other cryptocurrencies. Many potential investors have been hesitant to engage in the crypto market due to concerns about custody and the complexity of buying and storing digital assets directly. Bitcoin ETFs would address these concerns by allowing investors to participate indirectly, benefiting from the potential upside of bitcoin while relying on established custodial practices.
Gary Gensler, the current SEC Chair, has been openly skeptical of cryptocurrencies and has taken legal actions against several major crypto exchanges during his tenure. Earlier in the week, Gensler used social media to caution investors about the risks associated with crypto-related products. Notably, the SEC lost a court case against Grayscale, a crypto asset manager that intends to convert their over-the-counter trust holding bitcoin into an ETF. Speculation arose when the SEC declined to appeal the ruling, fueling hopes that the regulator would finally approve bitcoin ETFs.
The recent social media hack of the SEC’s Twitter account led to a false announcement about the approval of bitcoin ETFs. However, the SEC swiftly clarified that the tweet was unauthorized and emphasized their commitment to investigate the security breach. The decision on approving bitcoin ETFs is still pending, and asset managers eagerly await the SEC’s verdict. Depending on the outcome, the introduction of ETFs could usher in a new era for bitcoin investments, potentially attracting a broader range of investors to the cryptocurrency market.
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