SEC probes cybersecurity breach amid Bitcoin ETF approvalSEC probes cybersecurity breach amid Bitcoin ETF approval

On January 9, there was a huge cybersecurity breach involving the US Securities and Exchange Commission (SEC), causing a substantial damage in public confidence. According to Bloomberg, the SEC’s social media account was hacked, and the hackers falsely announced the approval of Bitcoin exchange-traded funds (ETFs). They briefly took control of the SEC’s X account and released a fake message saying that the agency had approved these much awaited items. This misleading information resulted in a short spike in Bitcoin prices.

This occurrence prompted a quick reaction from US officials, who launched an inquiry into the situation. It also renewed criticism of the SEC, particularly its cybersecurity procedures and general position on crypto currency. The SEC’s initial critical decision to approve a Bitcoin ETF rapidly became a major cybersecurity concern, drawing attention away from the expected news.

The consequences of this incident are far-reaching, revealing not just the susceptibility of critical financial organisations such as the SEC to cyber assaults, but also the potential market effect of misleading information in the bitcoin space. The event emphasises the necessity for stronger cybersecurity standards in regulatory organisations and the crypto currency ecosystem to protect against such manipulative behaviour and maintain market integrity.

After someone stole into the SEC’s X account, a false report said that the agency was okay with certain goods, which caused the value of the biggest crypto currency in the world to briefly rise. This made the US government start looking into the hack that happened on the social media account of Wall Street’s main regulator.

After this breach, the SEC said they would be working with law enforcement to look into what happened. They also made it clear that the post did not come from the SEC or its staff and that un authorized access had been stopped. According to the story, Gary Gensler spoke out about the issue on his own and made it clear that no choice had been made about ETFs.

Bloomberg reported in January that the SEC had found evidence of illegal behaviour on the @SECGov X account. They said that an unknown person had accessed it for a short time around 4 pm ET. After the fake post was taken down, Joe Benarroch, who is in charge of X’s business operations, told everyone that the account’s security breach was still being looked into and the cause was being sought.

Following this occurrence, over a dozen businesses have asked for clearance to launch Bitcoin-backed ETFs in the United States. The SEC has a deadline of January 10 to decide on at least one of these applications, prompting suspicion in the crypto currency industry that a series of rulings would be announced around that time.

Before a Bitcoin ETF linked to the spot market may be launched, two requirements must be completed. First, the SEC must approve the 19b-4 filings from the exchanges seeking to list these ETFs. Second, the regulator must approve the appropriate S-1 forms and registration applications from prospective issuers, including major players such as Black Rock Inc. and Fidelity.

According to reports, the SEC plans to vote on the exchanges’ filings (the 19b-4s) this week, while probable action on the issuers’ applications (the S-1s) may take place simultaneously. If the SEC approves both sets of conditions, the ETFs may begin trading as early as the next business day, according to the article.

Despite prior denials by Gensler and his predecessor Jay Clayton, who cited worries about investor protection and market manipulation, speculation has increased after the SEC’s legal failure against Grayscale Investments in August. This has raised hopes that the regulator may succumb to the growing clamour for a Bitcoin ETF.

This current development comes after Cathie Wood, CEO of Ark Investment Management, commented on the SEC’s likely approval of a spot Bitcoin exchange-traded fund (ETF). In an interview with CNBC, Wood detailed her firm’s combined proposal with 21 shares, which was scheduled for a decision on January 10, the first deadline for spot Bitcoin ETF applications this year.

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