Bitcoin ETF’s false start: Hack or fat-fingered SEC intern?

The SEC’s official X account posted that a spot Bitcoin ETF had been approved, only to claim its account had been compromised half an hour later.

The question everyone wants to know right now is: was the SEC’s tweet earlier today stating a Bitcoin ETF had been approved the result of a hack, or was it an official message that was accidentally sent too early?

The SEC denied its staff had any involvement in posting the “unauthorized” tweet — though some in the crypto community think otherwise. 

On Jan. 9, the official X (formerly Twitter) account of the SEC posted that it had granted approvals for Bitcoin ETFs to be listed on all registered national securities exchanges. This turned out to be false, according to statements from SEC Chair Gary Gensler and the SEC. 

The SEC’s account first posted a single tweet that read “$BTC.” It was deleted several minutes later, moments before the account posted the seemingly official announcement that said a Bitcoin ETF had been approved.

Cinneamhain Ventures partner Adam Cochran said this chain of events suggests that while the SEC was most-likely hacked, the announcement post could’ve also been legitimate. 

“My guess is that the SEC account was both hacked AND that the tweet was real,” he wrote in a Jan. 9 X post. “Hacker first tweeted and then deleted just a ticker. Then likely found the tweet with the announcement graphic and Gensler quote in the draft folder.”

My guess is that the SEC account was both hacked AND that the tweet was real.

Hacker first tweeted and then deleted just a ticker.

Then likely found the tweet with the announcement graphic and Gensler quote in the draft folder.

SEC wouldn’t get date wrong, and tweet only… pic.twitter.com/RQp7Mo4Zey

— Adam Cochran (adamscochran.eth) (@adamscochran) January 9, 2024

“Hacker wouldn’t be someone to meticulously plan and prepare a graphic that is in the style of the SEC and also be dumb enough to just tweet a ticker like it’s a meme. So both things are true, and the approval announcement is lined up,” Cochran added.

That said, there are plenty of competiting theories, with pundits on X arguing the post was likely the result of carelessness on behalf of an SEC employee, while others claimed something more sinister was at play.

VanEck advisor Gabor Gurbacs speculated that the high level of team coordination and rapid response times from both the SEC and Gensler suggested something suspicious about the announcement. 

I am no cybersecurity expert, but it seems almost impossible to notice a bad tweet from org account, tweet from the chair’s account to correct it, then recover a hacked social media account, then tweet about incident and response to it from hacked account, all in a few minutes…

— Gabor Gurbacs (@gaborgurbacs) January 9, 2024

“What if this was an inside job? Is the only way to stop or delay a Bitcoin ETF is to create an event like this?” Gurbacs added in another post. 

Another X user pointed to the SEC’s choice of words “compromised” and “unauthorized” to suggest that the account had not been hacked, or the post was meant to be sent later. 

Others have taken a fine-tooth comb to the “unauthorized” post, noting hashtags and the auto-appearing Bitcoin icon were out of place for the SEC. Cointelegraph also noticed that a “SEC.GOV” logo, which typically is shown on graphics shared by the SEC account, is not present in the fake tweet. Gary Gensler’s job title and name are also not fully capitalized, as they are in other images.

Cointelegraph also noticed that a “SEC.GOV” logo, typically shown on graphics shared by the SEC account, is not present in the fake tweet. Gary Gensler’s job title and name are also not fully capitalized, and the first quotation mark isn’t solid in color, as they are in other images.

Nah, we got Punk’d.

The “tell” on the official SEC account was when it used the btc emoji cashtag:

” #Bitcoin  “

on the “official” Tweet. pic.twitter.com/mW3b5nt339

— Compound248 (@compound248) January 9, 2024

Related: Lawyers, politicians call for investigation of SEC over Bitcoin ETF post

Adding further to the likelihood of a hack was the “Likes” section of the SEC’s official account, which showed the page had engaged with two crypto-related accounts around the same time it posted the false announcement. Based on its “Likes” history, the SEC typically only likes pots from accounts directly affiliated with the SEC.

The price of Bitcoin whipsawed violently in the dwindling hours of Jan. 9 amid the controversy, surging as high as $48,000 before plunging back down to $44,900 within the space of 15 minutes, per TradingView data. 

A spokesperson from the SEC told Cointelegraph that the agency’s staff played no role in publishing the false Bitcoin ETF tweet:

“The SEC’s @SECGov X/Twitter account has been compromised. The unauthorized tweet regarding Bitcoin ETFs was not made by the SEC or its staff.”