Fake Tweet From Hacked US SEC Account On Spot ETFs Leads To Sudden BTC Rally & Immediate Fizzle, Over $50 Million Liquidated

Crypto enthusiasts celebrated prematurely, only to witness a subsequent sharp decline of nearly 6 per cent to as low as $45,100 when it was revealed that the SEC account had been compromised.

BTC surged by 2.5 per cent to reach a fresh 19-month high of $47,900.

Bitcoin (BTC) experienced significant price fluctuations on Tuesday, triggered by a misleading social media post from the US Securities and Exchange Commission (SEC) regarding the approval of spot bitcoin exchange-traded funds (ETFs). The official SEC account on X (formerly Twitter) falsely claimed the approval, causing BTC to surge by 2.5 per cent to reach a fresh 19-month high of $47,900. Crypto enthusiasts celebrated prematurely, only to witness a subsequent sharp decline of nearly 6 per cent to as low as $45,100 when it was revealed that the SEC account had been compromised.

SEC Chair Gary Gensler promptly denied the news, confirming that the commission had not approved any bitcoin ETF applications, contradicting the false statement made on X. A spokesperson for the SEC informed CoinDesk that the @SECGov X/Twitter account had been compromised, emphasising that the unauthorised tweet about bitcoin ETFs did not originate from the SEC or its staff. A subsequent statement revealed that there had been unauthorised access and activity on the account by an unknown party, which had since been rectified.

The @SECGov X account was compromised, and an unauthorized post was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.

— U.S. Securities and Exchange Commission (@SECGov) January 9, 2024

Gary Gensler reiterated on his personal X account that spot bitcoin exchange-traded products had not received approval from the SEC.

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.

— Gary Gensler (@GaryGensler) January 9, 2024

The misleading information led to a tumultuous market, resulting in over $50 million worth of liquidated derivatives trading positions on crypto exchanges within an hour, as per CoinGlass data. Liquidations occur when exchanges forcibly close a trader's open position due to a loss of margin.

As of the latest update, BTC was trading slightly below $46,000, representing a 2 per cent decrease over the past 24 hours. Interestingly, this incident marked the second instance of false social media posts causing significant volatility during the day. Earlier, dogecoin (DOGE) experienced a 9 per cent surge following an X post about the supposed death of the token's mascot, only to decline when the news was debunked.

Alex Krüger, co-founder of Asgard Markets, commented on the day's events, suggesting that the fake ETF news revealed limitations on BTC's potential rally until actual ETF approvals materialise. Krüger stated in an X post, "Fake ETF news showed BTC upside is clearly capped until we see actual ETF inflows. Time for ETH to take over."

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