Crypto News

SEC Faces Investigation Over Alleged Market Manipulation Following False Bitcoin ETF Approval Announcement

The U.S. Securities and Exchange Commission (SEC) is under investigation for suspected market manipulation after a misleading announcement regarding the approval of Bitcoin Spot ETFs. Reports initially suggested the SEC’s endorsement of certain Bitcoin ETF funds, causing Bitcoin’s price to surge above $47,000 before stabilizing around $45,000.

In a concerning turn of events, individual X accounts were compromised, disseminating false information through posts claiming swift approval for Bitcoin ETF funds. U.S. attorneys and senators are urging Congress to investigate the SEC’s potential market manipulation in response to this breach.

The fraudulent SEC post, visible over 4 million times within its 20-minute existence, fueled market uncertainty. The SEC promptly removed the misleading information, prompting legal experts to indicate that the SEC must now initiate a self-investigation into the alleged market manipulation.

SEC Bad Handling Of The Case

According to insights from securities lawyers shared on Fox Business, the SEC’s handling of the situation is unprecedented.

While the SEC has never rejected ETF applications that have progressed to this stage, the market impact of the false information resulted in a Bitcoin price fluctuation, causing an estimated $31 billion loss—exceeding the market capitalization of the 250 lowest constituents in the S&P 500 and approaching the size of the FTX bankruptcy.

Notable figures in the crypto space, including @nsquaredcrypto, highlighted the substantial financial impact caused by the misinformation. Despite the setback, optimism persists as industry insiders, such as @ericbalchunas, anticipate potential approval in the near future, suggesting a launch by Thursday.

The SEC’s role in this incident underscores the challenges and risks associated with the intersection of traditional regulatory bodies and the dynamic cryptocurrency market, prompting calls for increased scrutiny and accountability.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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