The actual damage caused by the fake SEC ETF approval tweet is hard to quantify, however over $2 Billion dollars worth of Bitcoin were sent to exchanges in a mad rush, a trading volume that was only surpassed three times in the past according to CryptoSlate.
But wait there’s more — over $750 million of these were transferred at a loss, as Gary Gensler quickly announced that the SEC’s Twitter account was hacked and that the Bitcoin Spot ETF approval tweet was “unauthorized”.
The timing couldn’t have been worse as today January 10 2024 we are expecting an answer from the SEC with regards to the 10 Bitcoin Spot ETF applications which have been put forward by Blackrock, Vanguard, Ark and several other institutions.
This little maneuver wiped out over $50 billion dollars of value in marketcap in less than 15 minutes, shook and entire market, and liquidated many individuals who were expecting a market pump as a result, and we did have one, for about 3 minutes.
This naturally sparked significant controversy on X (Twitter), with many people asking the SEC to take accountability for this mess up — and rightfully so.
But just like Gary and the SEC, we’re getting ahead of ourselves here. Let’s back up a bit and start from the beginning.
Why is a Bitcoin Spot ETF so important to begin with?
Approval for Bitcoin Spot ETFs has been a topic of discussion in crypto for several months now. An Exchange-Traded Fund (ETF) is a type of investment fund that pools together and are designed to track the performance of a specific index, commodity, bond, or in this case Bitcoin.
The reason this topic creates so much movement in crypto is due to the increased level of adoption and exposure that a Bitcoin Spot ETF will generate. If approved, Bitcoin Spot ETFs will be traded like any other stock or commodity on a Stock Exchange.
The NYSE has a marketcap of $22.649 Trillion US Dollars. That’s nearly 15 times larger than the entire cryptocurrency market cap at the time of writing — $1.68 Trillion US Dollars.
You can see how such an financial instrument would open the gates to a much wider market, creating more demand for Bitcoin, and bringing the entire cryptocurrency industry up with it.
In a sense, it’s just like your uncle (not the creepy one) wins the lottery and shares some of the reward with you and the rest of your family.
The SEC Twitter Hack
January 9 2024 around 3pm ET time, The SECs official twitter account makes a post with nothing else but the $BTC ticker.
A Few minutes later, the infamous announcement gets posted.
People lose their damn minds and Bitcoin, along with top altcoins start Pumping. Ethereum reaches the highest value since May 2022 , trading just shy of $2500.
Exactly 15 minutes after it was posted, it all comes crashing down when Gary Genlser announces that the SEC Twitter account was compromised.
The @SECGov twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
— Gary Gensler (@GaryGensler) January 9, 2024
15 minutes more and the SEC managed to regain control over their Twitter account.
A few things to unpack here.
The SEC Twitter Hack Timeline
Something was off with how quickly the issue was resolved and how quickly was brushed under the carpet. People started speculating that is is not in fact a “hack”, and that the SEC are a bunch of incompetent silly sausages who happened to post the approval confirmation a day early, with Gary being the silliest sausage of them all.
After all, how could they have recovered their account after only 15 minutes of it being compromised? You can’t even reach out to a Twitter rep in 15 minutes. Or maybe people doubted the ability of an organsisation who won’t even 2FA their accounts to be able to restore access in a record period of time.
The SEC Hack Confirmed
Two minutes after the SEC reportedly got their account back, X confirmed that the account was indeed compromised and that the point of failure was the lack of 2 Factor Authentication on the account.
We can confirm that the account @SECGov was compromised and we have completed a preliminary investigation. Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number…
— Safety (@Safety) January 10, 2024
Get this — the Securities and Exchange Commission couldn’t even be bothered to Secure their own Twitter account, but the have the audacity to pretend that they are working to Secure your investments.
At this point, another theory started floating on X.
The SEC was hacked but the Tweet was real
Once people swallowed the bitter pill, followed by getting wrecked in the market, many started speculating that although the SEC’s account was compromised, the Tweet itself was real.
After all, the first post that the hacker posted was simply the $BTC ticker.
It didn’t look like the hacker had prepared a well-orchestrated message, trying to impersonate the SEC. The contrast between the announcement post and the $BTC ticker post seemed a bit too suspicious to discard the whole thing as a hack.
Another plot twist: the SEC Twitter hacker just used one of the SECs draft tweets and hit send $BTC
— Crypto Vinci 𓃓 (@____Vinci) January 9, 2024
Naturally, it’s just a theory, and one that you cannot really verify, but not outside the realm of possibilities.
Having been left disappointed and liquidated, there little else to do, so Crypto Twitter took to memes and absolutely cooked Gary and the SEC.
Crypto sleuth ZachXBT took this opportunity to remind Gary to follow security best practices on the Internet, by quoting the Same post that Gary tweeted a while back:
Telling others to MFA while you’re rawdogging it is not a good look. But it’s not the end of it.
A few days prior to this incident, well known crypto c̶o̶k̶e̶h̶e̶a̶d̶ shill Ben Armstrong (formerly known as Bitboy) tweeted saying that it’s time for him to take the Bitcoin Spot ETF Approval into his own hands, promising to go live at the SEC building, in what he was probably hoping to turn into another unhinged rant, similar to the one that caused his public meltdown a couple months back where he took his mistress to his ex employee’s home, arguing that this ex colleague of his stole his lambo, before being apprehended by police.
People were quick to poke fun at this by branding Ben as the hacker and mastermind behind the SEC Twitter account hack.
Finally, if there’s one thing that we’ve learned as a result of this is that we should not rush to buy the news, and if you do buy the news, just remember that someone else probably bought it way ahead of you and you might just be their exit liquidity.
The SEC may still rule on the Spot Bitcoin ETF approval today at 4pm ET so do bear that in mind and prepare for more market volatility. And if you don’t know what to do — do nothing.
Finally, if you’re into Algorithmic trading — check out algorithmic cryptocurrency trading platform Aesir! Aesir is a state-of-the-art trading platform that allows you to build complex crypto trading bots to maximize your gains.
Thank you for reading!
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