SEC Faces Criticism Over Bogus Bitcoin ETF Tweet, Calls for Investigation

Historical Denials and the Recent Hoax

Nearly seven years ago, the SEC rejected the initial spot bitcoin ETF application due to concerns of investor risk stemming from market manipulation. This rejection pattern continued over multiple applications.

Bogus Tweet Sparks Market Chaos

Tuesday's fake tweet from the SEC's official X account triggered a swift surge and subsequent plunge in Bitcoin's price, creating confusion over an apparent ETF approval. Chair Gary Gensler swiftly clarified through his personal account that no such approval had been granted, leading to continued market sell-off.

Calls for Investigation and Regulatory Accountability

Crypto-friendly lawmakers and social media users urged an investigation into the SEC's vulnerability to disinformation and its potential role in market manipulation. Senator Cynthia Lummis emphasized the need for transparency regarding the compromised account and its impact on market manipulation.

Irony in Regulatory Statements

Previous statements by the SEC, cautioning against misinformation and highlighting the reliability of their communications, were contradicted by the hoax tweet. Critics highlighted the irony of the situation, questioning the SEC's credibility regarding its own actions.

Repercussions and Questions Raised

The incident raised concerns about the SEC's commitment to safeguarding itself and investors. Lawmakers and observers questioned the seriousness with which the SEC followed its mandate, particularly regarding information dissemination and protecting market integrity.

Investigative Steps Taken

The SEC pledged to collaborate with law enforcement and government partners to investigate the unauthorized access and related misconduct following the episode. Uncertainty remains about the nature of the account compromise and its implications for market stability and investor protection.