SEC's Comedy of Errors: The Hilarious Fake Bitcoin ETF Approval

After more than a decade of yearning for a spot Bitcoin ETF in the US, the crypto community eagerly awaited the SEC's decision. Valkyrie co-founder, anticipating approval, set the stage for celebrations with expectations of trading beginning on January 11 after approval on January 10. As the countdown to the SEC's verdict on the much-awaited BTC ETF approached, little did anyone expect that the comedy of errors was about to unfold.

"All Spot BTC ETFs Approved" But Not Really

The script took a sudden twist on January 9 when the SEC's official account on X (formerly Twitter) posted a bombshell – ALL BITCOIN SPOT ETFS APPROVED. Cue the confetti and cheers, right? Not so fast.

Before the crypto enthusiasts could pop their champagne, Gary Gensler, the SEC Chair, crashed the party with a revelation that would make even the best stand-up comedians jealous. In a twist worthy of a Hollywood plot, Gensler disclosed that the jubilant announcement was nothing but fake news, and the SEC's Twitter account had been compromised. The laughter echoed through the crypto community as they tried to wrap their heads around the irony of a regulatory body falling victim to a Twitter hack.

The now-deleted tweet from the SEC that turned out to be fake news (Source: The SEC on X )

Lawmakers Astonished to Discover SEC's Top-Notch Cybersecurity - Or Lack Thereof

Now, let's talk about irony. In a two-act play, the SEC's drama continued with the entrance of U.S. senators seeking answers. Senator Bill Hagerty was quick to condemn the SEC's mishap, declaring it unacceptable and demanding accountability from Congress. Senator Lummis emphasized the risks of fraudulent announcements manipulating markets and called for transparency regarding the SEC's compromised account. Other lawmakers joined the chorus, demanding answers and accountability. Senators J.D. Vance and Thom Tillis sought a report from the SEC, expressing serious concerns about the commission's internal cybersecurity procedures. The irony, it seems, wasn't lost on Capitol Hill.

And here's the pièce de résistance in this grand theater of crypto absurdity: Just two months ago, the SEC posted a tweet saying, "Careful what you read on the internet. The best source of information about the SEC is the SEC." Oh, how times have changed! Two months later, it appears we can't even trust information about the SEC on the SEC. The irony is so thick you could cut it with a blockchain.

Source: The SEC on X

The SEC, in a bid to save face, pledged to work with law enforcement to investigate the hack.

However, the plot thickened when X (Twitter) confirmed that the SEC's account had been hacked and, brace yourselves, did not have two-factor authentication enabled. Yes, you read that right - a federal government agency, entrusted with overseeing financial matters, skipped the basic step of protecting its Twitter account with an extra layer of security.

Immortalization in the Hall of Crypto Fame

Cue the sarcastic applause from the crypto community. User Wsbmod on X didn't miss the chance to point out the irony, referencing a two-month-old tweet from none other than Gary Gensler himself . In the tweet, Gensler advised people to "set up multifactor authentication" to protect against theft and fraud. Oh, the sweet taste of irony!

Source: Gary Gensler on X

The crypto community, in its classic irreverent style, immortalized Gensler's tweet in an Ordinals Inscription, ensuring that the world would never forget the moment when the SEC preached security but failed to practice it.

Source: billyrestey on X

But the hilarity didn't stop there. Wsbmod, channeling the spirit of online mockery, created a meme poking fun at the SEC. The meme humorously underscored the irony of a regulatory body shouting about investor protection while leaving its own virtual doors wide open for mischievous hackers.

Source: wsbmod on X

Cryptocurrency enthusiasts, always armed with memes and wit, turned the incident into a virtual carnival of humor, highlighting the apparent gap between regulatory rhetoric and actual cybersecurity preparedness.

9fcdb60c-f630-4ced-bd78-f6a5c9d81ce3 Rollercoaster

As the laughter echoed, the consequences of the false announcement rippled through the markets. Bitcoin, initially skyrocketing to around $47,900 in response to the fake news, took a nosedive when reality struck. The price plummeted to $45,100 as Gensler clarified the situation, and the SEC's account was deemed compromised. The twist in the tale? Over $50 million worth of derivatives trading positions on crypto exchanges were liquidated within an hour, illustrating the volatile impact of misinformation in the crypto space.

Closing Thoughts

The SEC's fake news episode will be remembered as a cautionary tale of irony, vulnerability, and a good old-fashioned dose of humor. As the crypto community continues to navigate this digital circus, one can only hope that regulators learn to practice what they preach - especially when it comes to securing their virtual soapboxes. After all, in the wise words of the SEC, "Careful what you read on the internet." Indeed, careful indeed.

Disclaimer: The opinions expressed in this article are for informational purposes only. This article does not constitute an endorsement of any of the products and services discussed or investment, financial, or trading advice. Qualified professionals should be consulted prior to making financial decisions.