SEC Twitter hijacked to push fake news of hotly anticipated Bitcoin ETF approval

Buy the hype, sell the, wait, what do we do now?!

Updated The SEC today said its Twitter account was hijacked to wrongly claim it had approved a bunch of hotly anticipated Bitcoin ETFs, causing the cryptocurrency to spike and then slip in price.

In a now-deleted tweet shared in the past hour, the American financial regulator appeared to say: "Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges. The approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure continued investor protection."

But in the past few minutes, the tweet was removed. Gary Gensler, SEC chairman, then confirmed also on X that the message should not have gone out, and that no approval had been granted:

The @SECGov 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.

The SEC itself also confirmed the hijacking on X, or Twitter, or whatever we're calling it today.

The market has spent months if not years awaiting the SEC's approval, or blocking, of a number of spot Bitcoin ETF applications in the US. The commission was due to make a decision by Wednesday.

Amid that anticipation, Bitcoin has climbed 164 percent in the past year after the crypto-coin crash at the end of 2021. There was a concern the price was being pumped during the growing hype around the spot ETFs – exchange-traded funds – only to sell off when approval landed. On the other hand, approval may propel the value of the digital money.

With this fake tweet, we got to see how the market would react, which was perhaps the point of the stunt. There are also questions over how the SEC secures its X feed, and what protections are or need to be in place by the commission to prevent market manipulation through bogus tweets.

Spot Bitcoin ETFs are a way for investors to take advantage of Bitcoin's price movements, allowing them to dabble with or plow heavily into crypto-coins without having to directly buy them. The ETFs own the actual Bitcoin in wallets, and issue shares that track the price of the coins.

It's seen as a way to make Bitcoin more mainstream, and introduce it to more investors, including large ones that want to build some BTC into their portfolios. If approved, the spot ETFs will make it easier for people to speculate on Bitcoin – buying stock rather than coins – and gain or lose money as market forces dictate. Otherwise, they're just like any other ETF, with shares bought and sold via exchanges.

There's a lot riding on those funds, hence the anticipation and trading ahead of the SEC's approval or rejection – an SEC that in general has taken a hard line against crypto-bucks.

The regulator's boss Gensler earlier today warned: "If you're considering an investment involving crypto assets, be cautious. Crypto asset securities may be marketed as new opportunities but there are serious risks involved." He also linked through to this advice for investors-slash-gamblers.

Bitcoin spiked in price to $47,900 apiece today after the first tweet, and is currently at time of writing down 1.5 percent to $46,247. ®

Updated to add

Twitter has said that, following an investigation, the SEC's X account was hijacked "due to an unidentified individual obtaining control over a phone number associated with the @SECGov account through a third party."

Which sounds like the number linked to the account got SIM-swapped. We're also told two-factor authentication was not enabled. Doh.

The FBI is said to be investigating. And yes, in the end, the SEC approved the spot Bitcoin ETF applications.