Nearly
seven
years
ago,
the
Securities
and
Exchange
Commission
(SEC)
denied
the
first
spot
bitcoin
exchange-traded
fund
(ETF)
application,
citing
the
risk
presented
to
investors
by
market
manipulation.
It
would
become
a
familiar
refrain
for
the
countless
rejections
that
followed.
The
regulator’s
got
some
explaining
to
do.
Tuesday’s
bogus
tweet
from
the
SEC’s
official
X
(formerly
Twitter)
account
caused
a
rapid
pump
and
then
plummet
in
bitcoin’s
price
as
traders
tried
to
make
sense
of
the
apparent
approval.
By
the
looks
of
it,
the
powerful
regulator
had
just
greenlit
every
prospective
BTC
ETF
application,
delivering
bitcoin
speculators
their
long-awaited
victory
a
full
day
ahead
of
schedule.
Of
course,
the
suspicious
post
–
it
was
paired
with
a
$BTC
cashtag
–
was
a
hoax.
Within
minutes
Chair
Gary
Gensler
tweeted
from
his
own
account
that
SEC
had
not
approved
anything.
Bitcoin
markets
continued
their
sell-off
in
response.
The
whole
charade
prompted
calls
for
an
investigation
by
crypto-friendly
lawmakers
and
enraged
social
media
users
alike
into
how
the
SEC
allowed
itself
to
become
a
disinformation
platform.
“Fraudulent
announcements,
like
the
one
that
was
made
on
the
SEC’s
social
media,
can
manipulate
markets.
We
need
transparency
on
what
happened,”
tweeted
Senator
Cynthia
Lummis
(R-Wy.)
after
the
SEC
confirmed
its
account
has
been
“compromised.”
It
was
an
ironic
twist
in
what
many
expected
were
the
final
hours
of
the
SEC’s
stonewalling
of
the
spot
bitcoin
ETF.
The
SEC’s
own
statements
primed
traders
for
overreacting
to
this
type
of
misinformation.
In
mid-October
the
regulator
tweeted
“Careful
what
you
read
on
the
internet.
The
best
source
of
information
about
the
SEC
is
the
SEC,”
in
response
to
a
retracted
CoinTelegraph
tweet
that
stated
that
BlackRock’s
bitcoin
ETF
application
had
been
approved.
While
the
first
part
of
that
tweet
retained
its
credibility
Tuesday,
the
second
half
was
reduced
to
farce.
As
many
commentators
pointed
out,
even
the
SEC
cannot
be
trusted
for
what’s
going
on
at
the
SEC.
Last
week,
an
SEC
spokesperson
told
CoinDesk
that
any
decisions
would
first
be
posted
on
its
own
internal
EDGAR
database.
Of
course,
the
general
public
and
even
informed
observers
cast
such
guidance
aside
on
Tuesday.
“Does
this
mean
we
can
blame
more
of
the
@secgov’s
horrible
rulemaking
and
so-called
regulation
by
enforcement
on
a
‘compromised
account’?,
tweeted
Rep.
Bill
Huizenga
in
response
to
Gensler.
Beyond
the
gleeful
irony
of
it
all,
the
SEC’s
apparently
hacked
account
raised
uncomfortable
questions
about
how
seriously
the
regulator
took
its
mandate
to
protect
itself
in
order
to
protect
investors
(though
it’s
unclear
how
exactly
the
X
account
was
compromised).
“The
SEC
will
work
with
law
enforcement
and
our
partners
across
government
to
investigate
the
matter
and
determine
appropriate
next
steps
relating
to
both
the
unauthorized
access
and
any
related
misconduct,”
the
regulator
said
hours
into
the
episode.
