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SEC says it hasn’t yet approved bitcoin ETF and its X account was compromised

The SEC is expected to decide on bitcoin ETFs this week after opposing them for years.
The headquarters of the U.S. Securities and Exchange Commission (SEC) in Washington, DC, January 2021.
The Securities and Exchange Commission in Washington in January 2021.Saul Loeb / AFP via Getty Images file
/ Source: CNBC.com

The Securities and Exchange Commission said Tuesday afternoon that an announcement about bitcoin ETFs on social media was incorrect.

“The SEC’s @SECGov X/Twitter account has been compromised. The unauthorized tweet regarding bitcoin ETFs was not made by the SEC or its staff,” an SEC spokesperson told CNBC.

The false social media post said that the SEC had approved bitcoin ETFs for trading. The price of bitcoin briefly spiked after the initial post, but then quickly slid below $46,000.

In a later statement Tuesday evening, an SEC spokesperson told CNBC that the agency determined that there had been unauthorized access to the regulator’s X account “by an unknown party” for a brief period just after 4 p.m. ET.

“The SEC will work with law enforcement and our partners across government to investigate the matter and determine appropriate next steps relating to both the unauthorized access and any related misconduct,” this spokesperson said.

X said late Tuesday it has completed a preliminary probe into the compromised account of the U.S. Securities and Exchange Commission that displayed a false post claiming the SEC had approved bitcoin ETFs for trading.

“Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number associated with the @SECGov account through a third party,” X said in the post, confirming that the SEC’s account was compromised.

“We can also confirm that the account did not have two-factor authentication enabled at the time the account was compromised,” X said in the post.

The SEC is expected to make a decision on bitcoin ETFs this week after opposing them for years. More than a dozen asset managers have filed applications to create such a fund, including many that filed updated registration statements on Tuesday morning.

The price of the largest cryptocurrency has been climbing in recent months, in part because of growing optimism that the so-called spot bitcoin ETFs would be approved. Funds that track the price of bitcoin futures already trade on exchanges in the United States.

Crypto advocates contend that the launch of the spot bitcoin funds could bring in a new type of investors into digital assets. ETFs are an asset class that financial advisors use regularly. The idea is that advisors and investors who have been spooked by the intricacies around custody of bitcoin would be more willing and able to buy crypto in an ETF wrapper.

SEC Chair Gary Gensler has been a vocal opponent of crypto during his tenure, and the commission has brought legal action against several major crypto exchanges.

Last year, the SEC lost a court case against crypto asset manager Grayscale, which wants to convert an over-the-counter trust holding bitcoin into an ETF. The SEC declined to appeal that ruling, fueling speculation that the regulator would soon approve bitcoin ETFs.