Despite a security breach on X, the US Securities and Exchange Commission is still expected to announce on Wednesday whether it will approve spot-trading of Bitcoin exchange-traded funds (ETFs).
The regulator is expected to rule on at least one of the 11 applications – including from BlackRock, Ark Investments and 21Shares.
BlackRock and other issuers were already making moves ahead of Wednesday’s announcement. ARK Invest, Invesco and nearly a dozen others are offering steep discounts in a market that is poised to become competitive very quickly.
Should the SEC grant approval of the Bitcoin ETFs, trading could begin as soon as Thursday morning.
Approval of any of the proposals would mark a dramatic shift for the SEC, which for years has rejected applications due to fears over market manipulation.
Those fears were reignited on Tuesday night when the SEC said its X account was compromised following a post saying that it had approved Bitcoin ETFs. The unauthorised post was later taken down, but not before the price of Bitcoin rose by more than 2.5 per cent.
Bitcoin was valued at $44,877.50 as of Wednesday morning ET.
The SEC will have to investigate itself for market manipulation following the hacked post, Fox Business reported.
The US regulator’s approval of Bitcoin ETF would allow people to purchase the cryptocurrency without using a crypto exchange or broker, making it easier for traders to invest.
SEC chair Gary Gensler has made repeated warnings on the risks of investing in cryptocurrency, which he has likened to as “the Wild West”.
“Fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams. These investments continue to be replete w/ fraud- bogus coin offerings, Ponzi & pyramid schemes, & outright theft where a project promoter disappears w/ investors’ money,” he posted on X on Monday.
He also warned that investing in cryptocurrency “can be exceptionally risky”, noting numerous platforms that have lost value.
President Joe Biden’s administration launched a crypto framework in 2022 giving the SEC and Commidities Futures Trading Commission (CFTC) to investigate and enforce actions against unlawful actions in the digital assets market.
Since then, the SEC has targeted major crypto exchange platforms Coinbase and Binance. In separate filings, the US regulator accused the two of operating unregistered exchanges, among others.
Binance founder Changpeng Zhao in November also pleaded guilty to failing to implement an effective anti-money laundering programme, the Justice Department announced.
The Justice Department said Binance also agreed to pay $4.3 billion in penalties.
Updated: January 10, 2024, 6:40 PM
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