US SEC Faces Massive Backlash Over Fake Spot Bitcoin ETF ‘Approval’ Post

The US Securities and Exchange Commission (SEC) is facing flak after Chairman Gary Gensler confirmed that the agency’s X account was “compromised” to spread false information that spot Bitcoin exchange-traded funds (ETFs) had received the regulator’s nod.

A section of the crypto community believes that the SEC itself is to blame for the fiasco, as well as the turmoil in the crypto market that ensued. Senior Bloomberg ETF analyst Eric Balchunas took to X, the social media platform previously known as Twitter, and said the SEC was behind the whole mix-up. According to Balchunas, it was a case of “a scheduled tweet gone bad”.

Is SEC Trying To Cover Up Its Mistake?

In a separate X post, Balchunas said the SEC might have scheduled the tweet for January 10, the deadline set by the agency to approve spot Bitcoin products, but a staff member mis-scheduled it for Jan. 9.

The comments came after Elon Musk-led X acknowledged that SEC’s account was hacked, with an unidentified individual gaining access to a phone number linked to the account through a third party. The social media platform went on to say that two-factor authentication was disabled on the SEC’s account at the time of the breach.

Notably, Balchunas is not the only person who’s skeptical of the SEC’s side of the story. Former White House communications director Anthony Scaramucci said Gensler was lying when he said that the agency’s X account was “compromised”. Scaramucci believes an SEC staff member prematurely shared the news, which reflected “the amateurish and dishonest nature of the current SEC leadership regime.”

Interestingly, after Balchunas polled X users asking where the “approval” tweet came from, more than 83% of the voters said it came from “inside the SEC”.

Crypto Market Bore the Brunt of Fake Spot Bitcoin ETF Approval News

The fake Bitcoin ETF approval announcement spurred a brief rally in Bitcoin (BTC) prices, with the OG cryptocurrency reaching a fresh 19-month high of $47,900. Then, Bitcoin fell to as low as $45,100 after Gensler debunked the false spot Bitcoin ETF approval news. At press time, the BTC price stood at 45,807, down over 2% in the past 24 hours.

Meanwhile, as many as 11 companies — including BlackRock, Fidelity, Grayscale, and VanEck — have sought the SEC’s permission to launch a spot Bitcoin product, with the final decision on the joint Bitcoin ETF proposed by Ark Invest and 21Shares expected to be taken on Dec 10.

Also Read: Coinbase Executives Offer Expertise Amid SEC’s X Turmoil