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This comes just a day after an unidentified hacker compromised the SEC account on X and posted its approval leading to a brief surge in bitcoin prices.
The US Securities and Exchange Commission (SEC) has authorised 11 applications to offer exchange-traded funds (ETFs) tied to bitcoin in what has been described as a “landmark moment” for the crypto industry.
Approval of the ETFs including from BlackRock, Grayscale, Bitwise, Fidelity and Valkyrie came a day after the SEC saw its social media account on X being compromised when a hacker misleadingly posted the agency’s approval of bitcoin ETFs.
“The SEC has not approved the listing and trading of spot bitcoin exchange-traded products,” SEC chair Gary Gensler wrote on X on Monday. A day later, he issued a statement saying the SEC has approved the listing and trading of several spot bitcoin exchange-traded product shares.
#Bitcoin ETFs were (finally) just approved for trading tomorrow, after ten years. Maybe the politics in Congress around cryptocurrency will get better once they realize it's backstopping pension funds and retirement accounts.
— Edward Snowden (@Snowden) January 10, 2024
Gensler, who has previously expressed his concerns about the volatility of the crypto market, said the approvals should not be seen as an endorsement of the technology.
“While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin,” he wrote in the statement. “Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”
Edward Snowden, the famous whistleblower who has long expressed his support for bitcoin, took to X to express his approval of the SEC move to “finally” allow ETFs for trading after a decade.
“Maybe the politics in Congress around cryptocurrency will get better once they realise it’s backstopping pension funds and retirement accounts,” he wrote.
X promptly investigated the SEC hack earlier this week and concluded that the compromise was “not due to any breach” of its systems but because an “unidentified individual” obtained control over a phone number associated with the account through a third party.
“We can also confirm that the account did not have two-factor authentication enabled at the time the account was compromised. We encourage all users to enable this extra layer of security,” X posted.
Bitcoin prices surged in the aftermath of the hack and the misleading post claiming bitcoin ETFs had been approved, according to CNBC, but fell soon after the SEC clarification was published.
According to Nigel Green of DeVere Group, the latest SEC approval is a “landmark moment” for bitcoin and the wider crypto market that “boosts prices” in the long-term even if there’s a sell-off in the near-term.
“Institutional investors have long been cautious about entering the crypto space due to concerns about regulatory uncertainties and market integrity,” he said.
“The introduction of SEC-regulated bitcoin ETFs addresses these concerns by providing a transparent and secure investment vehicle, paving the way for institutional capital to flow into the market.”
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