- The SEC was recently hacked, leading to a false announcement that Bitcoin ETFs were approved. This caused Bitcoin’s price to spike and then crash.
- Securities lawyers say the hack likely violated the SEC’s new cybersecurity rules and that the SEC must investigate itself for market manipulation due to the resulting price shifts.
- The pending decision on a real Bitcoin ETF may now be complicated by the hack. The SEC will need to show it is preventing similar hacks and that the hack did not improperly influence the Bitcoin ETF approval process.
The SEC was recently the victim of a hack that caused Bitcoin’s price to dramatically shift. The hacker gained access to the SEC’s Twitter account and falsely claimed that Bitcoin ETFs had been approved. Securities lawyers now say the SEC must investigate itself for market manipulation.
The False Bitcoin ETF Approval Announcement
On Tuesday afternoon, the SEC’s Twitter account posted that Bitcoin ETFs had been approved by the SEC for listing on all registered national securities exchanges. However, SEC Chair Gary Gensler quickly clarified that the announcement was false and that the SEC’s account had been compromised.
Bitcoin’s Price Shifts Following the Hack
Following the false announcement, Bitcoin’s price spiked nearly $1,000 to over $47,000. But after Gensler revealed the hack, Bitcoin’s price crashed back below $46,000. This significant price shift has led lawyers to argue that the SEC must investigate itself for market manipulation.
Lawyers Claim Hack Violated SEC Cyber Security Rules
Securities lawyers told Fox Business that the hack would have violated new SEC cyber security rules adopted in July. These rules require the SEC to have stringent risk management practices for potential cyber security threats.
The Future of the Bitcoin ETF Decision
The Bitcoin ETF decision was expected this week, but it’s unclear if the timeline has changed due to the hack. Some experts believe the decision could still come as early as tomorrow. But the hack may complicate the approval process.
Conclusion
In the aftermath of the hack, the SEC finds itself in an awkward position. The false information briefly pumped up Bitcoin’s price significantly. The SEC will likely need to demonstrate that it is taking steps to prevent similar hacks in the future. And it may need to show that its pending Bitcoin ETF decision has not been improperly influenced by the hack.
