Everyone Wants the SEC’s Fake News to Be Real

In the many months and years that the Securities and Exchange Commission (SEC) has been mulling whether to approve a spot bitcoin ETF in the U.S., it has frequently cited the risk of market manipulation as a reason to be cautious. So, it was highly ironic yesterday that the SEC was itself the victim of that very threat.

A tweet from the SEC’s X (Twitter) account appeared at roughly 4 p.m. ET to say the agency had approved the first application, only for Chair Gary Gensler to shortly say thereafter that the news was untrue and the X account had been hacked.

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“The @SECGov twitter account was compromised, and an unauthorized tweet was posted,” Gensler wrote on his personal account. “The SEC has not approved the listing and trading of spotbitcoin exchangetraded products.”

Someone, unknown as yet, had gotten hold of the phone number the SEC uses for its account verification and, according to the “Safety” team at X, the SEC did not have two-factor verification on its X.

Crypto Twitter had a field day, with many high-profile commenters pointing out the double standard.

The price of bitcoin [BTC] briefly rose on the news (above $47,500) only to fall before its level at the time of the fake news (below $45,000). There was a flood of liquidations, as CoinDesk reported. This may indicate how a real announcement – expected today – might play market-wise. An exchange-traded fund announcement may be a “sell-the-news” event and the huge price rises we’ve seen in the last few months could be based on excessive expectations for the leading crypto.

Maybe, the SEC’s gaffe proves its point: nascent, unregulated markets are susceptible to malevolent actors. But surely the joke is mostly on the SEC. You would think that the most important financial regulator in the world would be careful enough to double-lock a social media account with so much influence. Wouldn’t you?

Read more: Did the Fake Bitcoin ETF Announcement Prove an SEC Approval Is a ‘Sell-the-News’ Event?

This isn’t the first time fake ETF announcement news has moved markets. Cointelegraph’s erroneous tweet in October also pushed bitcoin higher. Both episodes…