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Cryptocurrency prices fluctuated sharply on Tuesday after a false post on the US Securities and Exchange Commission's official X account claimed that the regulator had approved the first spot Bitcoin exchange-traded funds in the US.
The fake post stated shortly after 4 p.m. Washington time that the SEC was “approving #Bitcoin ETFs to list on all registered national securities exchanges.” It was immediately picked up on social media, business news websites and Bloomberg TV.
Just over 10 minutes later, the SEC chairman poured cold water on the announcement. Gary Gensler posted on his personal account on X: “The Twitter account @SECGov has been compromised and an unauthorized tweet has been posted. The SEC has not approved the listing and trading of spot Bitcoin exchange-traded products.”
An SEC spokeswoman said the original post “was not written by the SEC or its employees.” By 5:00 p.m., SEC staff had regained control of the X account and the false post was deleted.
“The SEC will work with law enforcement and our partners across the government to investigate the matter and determine appropriate next steps related to the unauthorized access and related misconduct,” the SEC said, attributing the unauthorized access “to an unknown party ” to.
Immediately after the release, Bitcoin rallied with a gain of 1.5 percent on the day, but quickly reversed when the news was confirmed to be fake and the price plunged as much as 3.4 percent.
“The account is secure and we are investigating the root cause,” said Joe Benarroch, head of business operations at X.
Cryptocurrency enthusiasts are on tenterhooks as the SEC is expected to decide on approving spot Bitcoin ETFs later this week, in what would mark a turning point for the digital asset.
At least 11 asset managers have applications pending with the SEC to launch spot Bitcoin ETFs. The SEC has a deadline of Wednesday to approve some applications.
Although the regulator has previously resisted such products, it now has less room for maneuver. A federal appeals court ruled last year that Grayscale's denial of a request to convert its $29 billion Bitcoin trust into such an ETF was “arbitrary and capricious.”
So far this year, the volatile cryptocurrency has gained around 7 percent on hopes the SEC would grant approval.
Several applicants said they had received feedback from Commission staff indicating approval was possible this week.
Applicants range from large asset managers BlackRock, Invesco and Franklin Templeton to smaller firms such as Ark Investment Management and Bitwise. Earlier this week, the companies announced fees for their future products, with several of the hopefuls either significantly reducing their fees or agreeing to waive them altogether shortly after launch.
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The SEC has long argued that spot Bitcoin ETFs cannot offer investors the same protections as traditional investment products. Gensler posted one on Monday short thread to
ETFs hold assets like mutual funds, but are traded on stock exchanges like stocks and typically enjoy preferential tax treatment in the United States. Each of the outstanding ETFs is intended to invest exclusively in Bitcoin, a development from previous products that invest in cryptocurrency futures or companies operating in the crypto industry.
Additional reporting by Hannah Murphy