SEC Not Approving Spot Bitcoin ETFs After All

Not even the U.S. Securities and Exchange Commission is immune to hacking.

On Tuesday, cryptocurrency backers went wild as the SEC’s account on the social media platform X announced that it had approved bitcoin exchange-traded funds (ETFs).

Following that announcement, the price of bitcoin shot up, though it came back down once news of the hack came out.

“The SEC has determined that there was unauthorized access to and activity on the @SECGOV account by an unknown party for a brief period of time shortly after 4 pm ET,” a spokesperson for the agency said in a statement.

The statement further said the access has since been terminated, and that the SEC was working with government partners and law enforcement agencies to investigate the incident.

Officials with X also confirmed that the SEC’s claims that their account was hacked were true. The “unidentified individual” who gained access to the account did so by being able to access a phone number that was associated with the SEC’s account through a third-party application.

Immediately following news of the hack, Republican lawmakers called for more clarity about how this all happened.

“Fraudulent announcements, like the one that was made on the SEC’s social media, can manipulate markets,” Rep. Cynthia Lummis (R-WY) tweeted. “We need transparency on what happened.”

Despite the social media gaffe, the SEC said it was still considering applications from 21Shares and Ark Investments — two large asset managers — to start a spot bitcoin ETF.

Other applications for this type of investment are pending before the SEC from about a dozen others, including Fidelity, VanEck, and BlackRock.

Should the SEC decide to approve these applications, it could revolutionize Bitcoin. It would allow retail and institutional investors alike to gain exposure to the largest cryptocurrency in the world without having to own it directly.

Many industry experts believe that, if these spot bitcoin ETFs were to be approved, it could boost the industry as a whole at a time when it’s been suffering due to multiple scandals.

Reuters cited anonymous executives in the industry who believe that the SEC will ultimately decide to approve at least the application from Ark/21 Shares.