SEC's Fake ETF Tweet Sparks Chaos, Wipes Out Millions in Crypto Market
Hacked SEC tweet triggered a market frenzy with over $220 million liquidated, making it the second-largest wipeout event of the year.
A hacked tweet from the SEC falsely announcing Bitcoin ETF approvals sent the cryptocurrency market into a frenzy on Tuesday. However, the euphoria was short-lived as reality dawned, leading to a financial disaster for thousands of traders.
The ensuing chaos resulted in over $220 million being liquidated, marking the second-largest wipeout event of the year to date.
According to data from Coinglass, more than 70,000 traders experienced the brunt of the liquidations as prices fluctuated dramatically. Bitcoin, the largest cryptocurrency by market cap, suffered the most significant fall. Long-position holders bore the brunt of the losses, with liquidations amounting to $133.5 million, compared to $87.29 million for short positions.
The single largest liquidation was a $6 million Bitcoin order on ByBit, contributing to the exchange’s total losses of $36.66 million. Market leaders Binance and OKX followed closely, with liquidations amounting to $83.88 million and $73.97 million, respectively.
At 4:11 p.m. ET, a fraudulent post appeared on the SEC's Twitter/X account, featuring a concocted quote attributed to SEC Chairperson Gary Gensler. "Today the SEC grants approval for #Bitcoin ETFs for listing on registered national securities exchanges," the deceptive post read. "The approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure continued investor protection." This seemingly legitimate announcement from the SEC sent waves of excitement through the cryptocurrency community. The news triggered a swift surge in Bitcoin's price, reaching nearly $48,000. However, the joy was short-lived.
A mere 15 minutes after the counterfeit announcement was made, Gensler clarified that the SEC account had been compromised and no approval had been granted for Bitcoin ETFs. "The @SECGov twitter account was compromised, and an unauthorized tweet was posted," Gensler stated on his personal Twitter/X account. "The SEC has not approved the listing and trading of spot bitcoin exchange-traded products."
Gensler's clarification was echoed by the official SEC account 16 minutes later, indicating that the agency had regained control of its account. This correction led to a rapid decline in Bitcoin's price, which fell to around $45,000 as swiftly as it had risen.