The crypto market experienced a roller-coaster ride on Tuesday, Jan 9, 2024, after a fake news hack on the U.S. Securities and Exchange Commission’s (SEC) X account claimed the approval of the first spot Bitcoin ETF. The SEC, the regulator of the financial markets, denied the news and said its account was compromised.
The fake news sent Bitcoin’s price soaring from $46,700 to almost $48,000 before crashing back down to $45,695, as the SEC and Chair Gary Gensler clarified the situation. ETF Analyst James Seyffart said the price swing was not that big, as most people expected approval anyway.
However, the hack also impacted some altcoins, which showed a positive trend despite the Bitcoin drop. According to on-chain data from Santiment, Ethereum, HEX, AAVE, Lido DAO, and PEPE gained value as the market realized the news was fake. Ethereum rose by 3.35% and Lido DAO by 19%.
SEC Hack Sparks Controversy, Uncertainty Over Bitcoin ETF
The hack raised questions about the SEC’s cybersecurity risk management and possible market manipulation. Lawyers suggested an investigation into the SEC by the SEC, as the agency is responsible for upholding market integrity. The SEC could also face violations of its own rules.
The hack also added to the controversy around the SEC’s stance on Bitcoin ETFs. The agency has not approved numerous applications, citing market volatility and investor protection concerns. The hack came a day before the SEC’s scheduled ruling on several pending ETF applications.
Industry experts said the SEC was bound, as rejecting the applications after speeding up the process with applicants would be unprecedented. Crypto analyst Scott Melker warned of a potential Bitcoin pump-and-dump scenario as investors nervously awaited the SEC’s decision. The hack could also affect the market sentiment around the spot Bitcoin ETF.
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