Bitcoin ETFs Not Approved Just Yet, SEC’s X Account Got Hacked

Bitcoin ETFs Not Approved

Bitcoin ETFs Not Approved, ETF excitement peaked after a bogus tweet claimed that the SEC had approved Bitcoin ETFs for trade. The United States Securities and Exchange Commission (SEC) was forced to extinguish a large fire after a bogus tweet from its compromised X account fraudulently claimed Bitcoin ETF clearance.

This briefly raised the price of Bitcoin before the SEC stated that it was the product of a hack. Amid all this chaos, the SEC is about to decide on Bitcoin ETFs, and some asset managers are eagerly anticipating clearance for their ETF applications.

Bitcoin ETFs Not Approved Just Yet, SEC’s X Account Got Hacked

Bitcoin ETFs Not Approved Despite this, it is still unclear how the SEC will proceed, with options including a seriatim vote or delegating the decision to its staff. The SEC’s mixed history with crypto ETFs further adds to the confusion and speculation surrounding the approval of Bitcoin ETFs.

False Tweet Causes Bitcoin ETF Confusion, the United States Securities and Exchange Commission (SEC) has been at the center of a misinformation storm during the last 24 hours.

Following a bogus announcement on social media concerning the approval of Bitcoin exchange-traded funds (ETFs). The confusion began with an unauthorized tweet from the SEC’s hijacked X account claiming that Bitcoin ETFs had been cleared for trading.

This fake report temporarily increased the value of Bitcoin (BTC), sending it past $46,000. However, the joy was short-lived, as the SEC swiftly emphasized that the tweet was the product of a security compromise rather than an official statement from the agency.

An SEC official told CNBC that an unknown entity entered the regulator’s X account. The breach, which occurred soon after 4 p.m. ET, resulted in the release of bogus information—the SEC also reaffirmed its commitment to collaborating with law enforcement and government partners to investigate the incident and address any resulting misbehavior.

This occurrence occurs at a key time for the SEC, as the commission is slated to reach a ruling on Bitcoin ETFs shortly. The regulator has always opposed Bitcoin ETFs, but the environment appears to be changing, as many individuals believe the ETFs will be allowed. Over a dozen asset managers have applied to construct Bitcoin ETFs, with many changing their registration statements in the hours preceding the fake tweet.

In recent months, the price of Bitcoin has risen, fuelled in part by anticipation over the impending approval of Spot Bitcoin ETFs. Unlike funds that track Bitcoin futures, these ETFs would directly monitor Bitcoin’s price, potentially luring a new group of investors to the crypto market.

Given the complexities around the cryptocurrency’s custody, financial advisors, who frequently rely on ETFs, are expected to find these products more approachable and less scary than direct Bitcoin investments.

SEC Chair Gary Gensler, renowned for his negative attitude toward cryptocurrencies, has actively informed investors about the hazards involved with crypto-related products.

His approach, combined with the SEC’s legal efforts against large crypto exchanges, has produced an image of a regulator wary of adopting digital assets too quickly, leading some in the sector to predict that Bitcoin ETFs may only be approved next year.

Interestingly, the SEC’s recent setback in a court fight against crypto asset management Grayscale, which seeks to convert a bitcoin holding trust into an ETF, has stoked rumors about the agency’s possible shift in stance. Some perceive the SEC’s decision not to appeal the court’s order as an indication that bitcoin ETFs will be approved soon.

Key Updates From BlackRock, Invesco, Galaxy, and Others

The SEC was not the only one scrambling since this historic week began. Several financial firms, including BlackRock (BLK), VanEck, Invesco, Galaxy, ARK 21Shares, Grayscale, and others, are well prepared to launch Bitcoin ETFs in the United States. On Tuesday, these companies filed new papers.

The SEC issued comments just hours after the companies submitted documents describing the costs for their proposed products on Monday. This resulted in an inflow of updated filings on Tuesday.

One of the most significant improvements to the filings is the insertion of specific text targeted at protecting shareholders in the event of insolvency and preventing conflicts of interest among the ETF’s authorized participants. Invesco and Galaxy also altered their proposed fee structure, lowering it to 0.39% from 0.59%.

These latest events reflect an almost unprecedented amount of engagement between the SEC and prospective ETF issuers, particularly given the rapid succession of filings, comments, and updates within a 24-hour window. This has inevitably been interpreted as a sign that the SEC may accept all petitions this week.

An Alternative Outcome

Despite the coming deadline for the Ark and 21Shares proposal, there is anticipation that the SEC will not publicly vote on it. The agency’s next meeting is planned for Jan. 11, just one day after the deadline, raising the potential of a seriatim vote, which allows commissioners to vote individually without holding a public meeting.

This approach entails circulating the topic among commissioners, who vote before passing it on to the next person. While this method can be quick, it can allow for additional delays because any commissioner can stall the process.

The SEC has repeatedly declined to vote on cryptocurrency ETFs, instead delegating the choice to its staff. However, this delegated authority may be challenged by commissioners, thus extending the decision-making process even further.

Historically, the SEC has taken a mixed stance on cryptocurrency ETFs. In January 2023, Chair Gary Gensler and Commissioners Caroline Crenshaw and Jamie Lizárraga voted to reject a proposal by Ark and 21Shares.

Previous attempts by other entities, such as the Winklevoss twins in 2016, were also unsuccessful. However, the SEC has begun to be more transparent, as evidenced by the smooth approval of Bitcoin futures ETFs in 2021.

The SEC has declined to comment on whether a vote will take place this week, leaving the community to seek signs on EDGAR or the SEC website for any changes, which is a bit of a problem now that the SEC’s official X page has been breached in the previous day.

 

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