Following Tuesday's security breach of the Securities and Exchange Commission's Twitter account, securities lawyers say the SEC might need to conduct an internal investigation for potential market manipulation.
The false tweet signaling approval of Bitcoin ETFs significantly influenced Bitcoin BTC/USD's price, causing rapid fluctuations in the cryptocurrency market.
The SEC's prompt correction stating the tweet was fake resulted in a subsequent price drop.
This sequence of events may necessitate the SEC to investigate its role in these market movements, legal experts told FOX Business, the network's correspondent Charles Gasparino said in a tweet.
The situation is further complicated by new SEC rules adopted in July requiring stringent cybersecurity risk management.
'Unacceptable': U.S. Sen. Bill Hagerty (R-TN) said in a tweet that, just like the SEC would demand accountability from a public company if they made such a colossal market-moving mistake, Congress needs answers on what occurred.
"This is unacceptable," he said.
Also Read: Should Nations Try To Ban Bitcoin? X's Community Notes Dispute Article's Claims On Energy Usage
Asked to comment on the issue, Eric Balchunas, senior ETF analyst for Bloomberg, told Benzinga the tweet would have made perfect sense at the same time on Wednesday, which is when an announcement was expected — suggesting that someone at the SEC may have erred.
"On flip, it could have been hacked, which is a whole other issue. That said we don't think this derails timeline for a Thursday launch," he said.
Gabor Gurbacs, founder of PointsVille, expressed skepticism about the rapid response and recovery from the hack, highlighting potential cybersecurity weaknesses.
Peter Schiff, chief economist and global strategist at europac.com, commented on the market's reaction, suggesting the expectation of an actual Bitcoin ETF approval might not materialize as speculated by investors.
Benzinga's Take: The incident has placed the SEC in a peculiar position.
Historically, the SEC has never rejected ETF applications that have progressed as far as the current Bitcoin ETF proposals.
An outright rejection now would be unprecedented and could have significant ramifications for the cryptocurrency market.
Read Next: Crypto Bear Predicts Spot ETF Will Spark Rallies Before 'Massive Correction' For Bitcoin, Ethereum
Illustration created using Shutterstock photo.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
