Security Breach at SEC Leads to Bitcoin ETF Chaos

The cryptocurrency industry was euphoric for 15 minutes. At 4:11 p.m. on Tuesday, the official X account of the SEC announced the approval of a new investment product tracking the price of Bitcoin, which was celebrated by Coinbase and crypto fans. However, at 4:26 p.m., Gary Gensler, the chair of the SEC, posted that the agency’s account had been compromised, confirming the hack in an emailed statement.

The crypto industry has been pursuing an investment vehicle known as an exchange-traded fund (ETF) tied to the price of Bitcoin, with a Jan. 10 deadline for the SEC to decide whether to allow a Bitcoin ETF. There was speculation about the timing of an approval and the involvement of major financial firms like BlackRock and Fidelity.

“The SEC has not approved the listing and trading of spot bitcoin exchange-traded products,” Mr. Gensler wrote in his post. An ETF would allow investors to own part of a basket containing Bitcoin, drawing billions of dollars of new investment to the industry.

The approval of the Bitcoin ETF was expected to be a historic day for the industry, but the announcement turned out to be a hack, causing a brief surge in the price of Bitcoin before dropping after the SEC’s announcement of the hack.

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