For 15 minutes, the cryptocurrency industry was exhilarating.
At 4:11pm on Tuesday, the SEC's official X account announced that regulators had approved a new investment product to track the price of Bitcoin, a clear victory for the beleaguered cryptocurrency industry. Coinbase, the giant cryptocurrency exchange, Posted a festive banner. Cryptocurrency fans hailed the day as a historic day for the industry. Bitcoin price rose.
Then at 4:26 p.m., Gary Gensler, Chairman of the Securities and Exchange Commission, spoke, to publish That the agency's account had been hacked, resulting in an “unauthorized tweet.” An SEC spokeswoman confirmed the hack in an emailed statement.
The security breach was the latest development in the cryptocurrency industry's years-long pursuit of an investment vehicle known as an exchange-traded fund tied to the price of bitcoin. Since the fall, cryptocurrency enthusiasts have been counting down the days until the Jan. 10 deadline for the Securities and Exchange Commission to decide whether to allow a bitcoin exchange-traded fund. Bitcoin's price had risen more than 60 percent in recent months, driven by growing optimism that approval was imminent. .
The announcement was widely expected this week, as major financial companies such as BlackRock and Fidelity prepare to launch Bitcoin products. On social media, speculation raged about the exact timing of the approval, inspiring memes about the once-obscure SEC actions and catapulting ETF analysts to online stardom.
But the industry will have to wait.
“The SEC has not approved the listing and trading of Bitcoin exchange-traded products,” Mr. Gensler wrote in his post.
A representative for X, the platform formerly known as Twitter, did not immediately respond to a request for comment.
An exchange-traded fund (ETF) is a basket of assets, where stocks are traded on traditional exchanges such as the Nasdaq. Investors in a Bitcoin ETF will own part of a basket containing Bitcoin, saving them some of the risks and inconveniences associated with purchasing cryptocurrencies directly.
Cryptocurrency enthusiasts have long hoped that approval of the financial product would attract billions of dollars in new investment into the industry, attracting wealth managers who have in the past hesitated to invest client funds in cryptocurrencies.
For years, the SEC resisted industry pleas, arguing that the cryptocurrency market was ripe for manipulation. But in August, the agency lost a legal battle with a company that had hoped to introduce a Bitcoin fund, paving the way for its approval.
This legal win was a rare bright spot in an otherwise bleak period for the cryptocurrency industry. Since mid-2022, cryptocurrency prices have collapsed, and several major companies have declared bankruptcy, leading to criminal prosecutions. Mr. Gensler has led the charge against the industry, filing lawsuits against prominent companies such as Coinbase and its largest international competitor, Binance.
So the cryptocurrency industry was ready to celebrate when a social media post went up on the SEC's official X account late Tuesday afternoon. A short statement appeared above Mr. Gensler's thumbnail.
“Today, the SEC granted approval to list Bitcoin ETFs on all registered national exchanges,” the post read. “Approved Bitcoin ETFs will be subject to ongoing monitoring and compliance measures to ensure investors continue to be protected.”
Bitcoin's price briefly rose to nearly $48,000, before falling to nearly $45,000 after the SEC announced the hack.
Stephanie Allen, a spokeswoman for the agency, said an “unknown party” accessed the SEC's account briefly shortly after 4 p.m.
“This unauthorized access has been terminated,” she said. “The SEC will work with law enforcement and our partners across government to investigate the matter and determine appropriate next steps regarding both unauthorized access and any related misconduct.”
On social media, online sleuths distributed screenshots an offer The hacked SEC account also liked several cryptocurrency-related posts. Cameron Winklevoss, founder of cryptocurrency company Gemini, Accused The agency “manipulates markets and harms American investors.”
“The SEC will hold a public company accountable if it makes such a massive, market-impacting mistake,” said Sen. Bill Hagerty, Republican of Tennessee. to publish. “Congress needs answers to what just happened.”
