For a quarter of an hour, an exchange traded fund (ETF) linked to Bitcoin was apparently legal in the USA. That's how long it took the powerful US Securities and Exchange Commission (SEC) to clarify that the message in which it announced this historic move for the cryptocurrency sector was actually true an “unauthorized tweet.” The euphoria sparked in the previous moments faded and gave way to confusion and requests for explanations. How is it possible that the manager's social network account X was hacked? Cameron Vinklewoss, one of the famous investor twins, attacked the organization: “Today the SEC showed what it does best: manipulate markets and harm American investors,” he tweeted.
ETFs are investment products that reflect the valuation of an asset such as a commodity, currency, bond, stock or stock index. They are put on the market by the hundreds and have become a widespread investment, including for private individuals. However, in the case of the cryptocurrency sector, the SEC's approval of the first Bitcoin-linked ETF is like crossing the Rubicon, emerging from the darkness of unregulated investments and seeing the light of legal recognition, escaping the wild world and entering the civilization of official investments . An ETF would provide a way to invest in Bitcoin without having to purchase the cryptocurrency directly on an exchange like Binance or Coinbase.
The SEC is the body that makes life difficult for most industries. Despite acting late and failing to prevent scandals, millions in losses and scams, such as the crash of Sam Bankman-Fried and the bankruptcy of its FTX market, the regulator is pursuing cryptocurrencies to enforce strict delivery requirements and collateral trading. This has led to sanctions proceedings and fines against markets, organizers, advertisers and other players in the crypto universe.
Among all cryptocurrencies, Bitcoin has always enjoyed special and more respectable treatment, although it also has strong critics. Passing the SEC filter with the new investment vehicles (ETF) would mark their crowning achievement in the investment universe: Cryptocurrency proponents believe they would attract billions of dollars of investment in the crypto asset by making it easily accessible to everyone Bet on the rise or fall of its price. Since the regulator began considering the approval of these new products, the price of Bitcoin has skyrocketed. This Wednesday, the false tweet saw the price shoot up to $48,000 before falling to around $45,000 with the denial.
The regulator's decision was expected this week, adding credibility to the false announcement. “The SEC today granted approval for Bitcoin ETFs to be listed on all U.S. markets. “The approval of Bitcoin ETFs is subject to future monitoring and additional measures to ensure adequate protection for investors,” said the regulator’s fake tweet, which also included a photo of its president, Gary Gensler, posted at 4:11 a.m was posted on the east coast, six hours more on the Spanish mainland.
Gensler himself caused alarm with a message from his account posted at 4:25 p.m.: “The Twitter account @SECGov has been manipulated and an unauthorized tweet has been published.” “The SEC has suspended the listing and trading of exchange-traded Bitcoin spot products are not approved,” his message read. The SEC regained control of his account on the social network
The @SECGov The Twitter account was compromised and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot Bitcoin exchange-traded products.
–Gary Gensler (@GaryGensler) January 9, 2024
This is not the first time that false information about the future of Bitcoin has been published on regulated markets. In October, a hoax suggested that fund manager BlackRock had received approval for a Bitcoin ETF, driving up the cryptocurrency's prices.
Politicians, particularly those in the Republican Party, who have long expressed frustration with the way Gensler runs the SEC, were quick to express anger over the SEC's lax security controls over their accounts. “Just as the SEC would hold a publicly traded company accountable if it made a colossal, market-moving mistake, Congress needs answers to what just happened,” said Sen. Bill Hagerty, R-Tenn., a member of the Banking Committee the Senate, according to testimony collected by AP.
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