SEC denies bitcoin ETF approval after X account compromised

Chair Gary Gensler denounces unauthorized social media post.

The frenzy over the prospect of the Securities and Exchange Commission approving the first bitcoin ETFs reached new levels Tuesday when the regulator’s X account sent out a tweet saying it had granted approval, only for chair Gary Gensler to reveal five minutes later that the account had been compromised.

With the industry on tenterhooks, those five minutes proved long enough for many to react, with Barron’s even sending out a news alert … and then posting another one correcting the error.

Gensler tweeted: “The @SECGov twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.”

The wait, therefore, goes on, although a decision is widely expected on Wednesday. About a dozen companies have filed for spot bitcoin ETFs, Bloomberg reported. The cryptocurrency jumped to a 21-month high this year amid widespread expectations that SEC approval will be granted. The SEC faces a Wednesday deadline to weigh in on an application from Ark and 21Shares.

In anticipation of the potential green light, Invesco, Bitwise, Valkyrie and WisdomTree lowered fees in their spot Bitcoin ETF applications, according to updated filings.

Lobbyists were also eager to burst out of the gate to praise a Bitcoin ETF Tuesday — and jumped the gun.

“The SEC’s approval of spot Bitcoin ETFs is an important step for American investors who have advocated for a clear regulatory framework rather than regulation by enforcement,” American Securities Association CEO Chris Iacovella said in a statement that hit an InvestmentNews reporter’s email inbox at 4:29 p.m.. “Regulated spot Bitcoin ETFs will give American investors the freedom to choose to participate in this alternative class, and we welcome it.”

A couple of minutes later, Gensler posted his Tweet warning that that the SEC’s account had been compromised and about 30 minutes later, ASA reined in its enthusiasm.

“The American Securities Association (ASA) prematurely released a statement relating to spot Bitcoin ETFs,” the group, which represents regional financial firms, admitted in a statement that IN received at 5:02 p.m.