SEC Accused of BTC Market Manipulation Following ETF Tweet

• SEC's First Bitcoin ETF Denial and Subsequent Market Manipulation
• Unanticipated Tweet from SEC's Account
• Reactions Post the False Tweet
• Irony in the SEC's Stance on Bitcoin ETF
• SEC's Advisory on its Credibility and Trust
• Questions Raised Post the Incident

SEC's First Bitcoin ETF Denial and Subsequent Market Manipulation

Almost seven years ago, the Securities and Exchange Commission (SEC) rejected the initial application for a spot bitcoin exchange-traded fund (ETF), citing the potential risk to investors due to market manipulation. This reason was to be repeatedly cited in the many subsequent dismissals.

Unanticipated Tweet from SEC's Account

On a Tuesday, an unexpected tweet from the SEC's official X (previously known as Twitter) account led to a quick boom and drop in Bitcoin$42,260 -0.64%'s value, as traders grappled with the seeming approval. At first glance, it appeared the potent regulator had given the nod to all forthcoming BTC ETF applications, gifting Bitcoin speculators their long-anticipated triumph a day earlier than expected. However, it was quickly realised that the dubious post, which was tagged with a $BTC cashtag, was a sham.

Reactions Post the False Tweet

Within minutes, Chair Gary Gensler clarified via personal tweet that the SEC had not sanctioned anything, a revelation which prompted Bitcoin markets to continue their Sell-off. This entire debacle sparked demands for an investigation by crypto-supportive lawmakers and incensed social media users on how the SEC permitted itself to become a disinformation platform.

Senator Cynthia Lummis (R-Wy.) expressed her concern on Twitter following the SEC's confirmation that its account had been 'compromised'. She emphasized the need for transparency on the occurrence, stating, Fraudulent announcements, like the one that was made on the SEC's social media, can manipulate markets.

Irony in the SEC's Stance on Bitcoin ETF

The unexpected event added an ironic twist to what were presumed to be the final hours of the SEC's blockage of the spot bitcoin ETF.

SEC's Advisory on its Credibility and Trust

In October, the regulator had warned, Careful what you read on the internet. The best source of information about the SEC is the SEC, while responding to a withdrawn CoinTelegraph tweet which claimed that BlackRock's bitcoin ETF application had been approved. The second part of that tweet lost its credibility due to this incident, making it clear that even the SEC cannot be trusted for the happenings at SEC.

Questions Raised Post the Incident

Despite the apparent moment of irony, the SEC's seemingly hacked account brought up uncomfortable questions about the regulator's dedication to its mandate of protecting itself to guard investors. This incident has made it unclear how exactly the X account was compromised.

The SEC will collaborate with law enforcement and our partners across the government to examine the matter and deduce the suitable next steps relating to both the unauthorized access and any connected misconduct, stated the regulator several hours after the occurrence.

Edited by Jonathan Stoker