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Bitcoin Volatility Spikes Following False SEC ETF Approval Claim

Bitcoin experienced significant price fluctuations recently after a false announcement claimed the U.S. Securities and Exchange Commission (SEC) had approved the first-ever U.S. spot bitcoin exchange-traded funds (ETFs).

The Financial Times reports the cryptocurrency market experienced a major fluctuation in activity recently after a misleading message was posted on the SEC’s official social media account.

The post, which was published shortly after 4 p.m. Washington time, incorrectly claimed the SEC had authorized Bitcoin ETFs to be listed on all registered national securities exchanges. This news caused immediate ripples across various platforms, including social media, business news websites, and Bloomberg TV.

SEC Chair Gary Gensler promptly addressed the situation, clarifying on his personal social media account that the SEC’s account had been compromised and the post was unauthorized. He confirmed that the SEC had not approved the listing and trading of spot bitcoin exchange-traded products. An SEC spokeswoman later stated that the original misleading post was not made by the SEC or its staff. By 5 p.m., SEC staff had regained control of the account and removed the false post.

The incident was caused by an unknown group or hacker gaining control over a phone number associated with the SEC’s account and did not result from a breach of Twitter’s security systems. The SEC’s account shockingly lacked two-factor authentication at the time of the compromise, making it easier for hackers to gain access.

The immediate market reaction to the fake post was significant, with Bitcoin surging and registering a 1.5 percent gain on the day, but quickly dropping by 3.4 percent once the news was confirmed as fake.

Crypto investors are currently anticipating the approval of several spot bitcoin applications by the Securities and Exchange Commission, which could be announced as early as Wednesday.

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