The U.S. Securities and Exchange Commission (SEC) found itself at the center of a major cryptocurrency market disruption as hackers gained access to its official Twitter account, known as SEC X.
The breach led to a series of fake tweets that caused significant price volatility in the Bitcoin (BTC) market, liquidating nearly $90 million worth of long and short positions.
Hackers seize control of SEC X Twitter account
On Tuesday, an unknown group of hackers took control of the SEC’s Twitter account, SEC X. It used it to post misleading tweets about the highly anticipated decision on a Bitcoin exchange-traded fund (ETF) approval. The first tweet contained a nod towards the ETF approval, creating a stir among cryptocurrency enthusiasts and traders.
Shortly after, the account posted a single “$BTC” tweet, further fueling speculation about the SEC’s stance on Bitcoin.
The fake tweets had an immediate and substantial impact on the Bitcoin market. Bitcoin’s price surged from $46,800 to $47,680 in minutes as traders and automated bots reacted swiftly to the news. Within a ten-minute window following the initial tweet, more than $500 million in futures positions were opened, reflecting the intense interest and trading activity.
However, the rapid price movements also triggered significant liquidations in highly leveraged positions. Approximately $50 million in long positions were liquidated, while $36 million in short positions were also impacted. Liquidation occurs when traders fail to meet the margin requirements for their leveraged positions, forcing exchanges to close their positions to prevent further losses.
Impact on price volatility and futures market
The liquidations resulting from the fake tweets had a notable effect on the cryptocurrency futures market. Such data signals traders that leverage is being effectively washed out from popular futures products, indicating a short-term decline in price volatility. This phenomenon underscores the inherent risks associated with highly leveraged trading in the cryptocurrency market.
In the wake of the Twitter account hack and subsequent price fluctuations, the cryptocurrency community eagerly awaits the SEC’s decision on thirteen proposed Bitcoin ETFs. The decision is scheduled to be announced on Wednesday. Bloomberg analysts have placed approval odds at over 90%, while crypto market bettors have estimated a smaller 85% chance of approval.
The incident raises manipulation concerns
The hack of the SEC X Twitter account and the subsequent market reaction have raised concerns about the susceptibility of the cryptocurrency market to manipulation. This incident highlights the potential impact of misinformation and fake news on asset prices, emphasizing the need for increased vigilance and security measures within the industry.
Cryptocurrency market participants, including traders and investors, are urged to exercise caution and verify information from official sources before making trading decisions. The incident is a stark reminder of the market’s vulnerability to external influences and underscores the importance of due diligence.
As the cryptocurrency market grows and attracts more attention, regulatory bodies and industry stakeholders are likely to intensify efforts to enhance cybersecurity measures. Protecting official accounts and platforms from unauthorized access and manipulation will be key in mitigating such risks.