Cointelegraph reveals details of fake Bitcoin ETF story

On 16 October, the crypto media outlet Cointelegraph published a post on X about the approval of a spot Bitcoin-ETF by BlackRock. Against the backdrop of the news, Bitcoin’s price quickly jumped to $30,000, but the asset also fell just as rapidly after reports of a fake.

The US Securities and Exchange Commission (SEC), BlackRock itself and a number of other media outlets issued a denial.

Later that same day, Cointelegraph published a piece with apologies and an explanation of the situation. According to representatives of the publication, the social media post was hastily published without the editor’s approval.

“It was a lie, the result of misinformation. The source of the news was an unverified screenshot from an X user who claimed to have taken it from a Bloomberg terminal,” the release states.

According to an internal investigation, the editorial policy on fact-checking before publication was not followed.

At 16:17 (Kyiv/Moscow time), the Cointelegraph team located information about the approval of the Bitcoin-ETF. For a while, the journalists cross-checked the facts and could not determine their authenticity. However one staff member rushed and posted the post on X.

Subsequently, the Telegram account that had been the original source of the news was deleted.

Initially no one noticed the catch, as Bitcoin’s price rose, as is often the case in the wake of significant positive news. But by 16:48 Cointelegraph had received the first reports of the fake information.

Journalists began searching for an alternative source, but none was found. The editors then decided to add a warning about unverified information (appending "reportedly" at the end of the sentence).

Subsequently Cointelegraph approached Bloomberg and BlackRock for confirmation and, not obtaining it, removed the post. After 17:00, staff noted a large number of liquidations.

“The incident reminded the Cointelegraph team that our actions have serious consequences for the cryptocurrency community. We strive to learn from our mistakes and adhere to the highest standards of journalism,” the company concluded.

Following the incident, crypto users criticised the publication and began constructing their own theories. Rollbit, a trading platform, attached a screenshot of a suspiciously profitable trade by a user with the handle Cointelegraph.

This you? pic.twitter.com/itGbMEKByV

— Rollbit (@rollbitcom) October 16, 2023

The image shows a closed Bitcoin futures long position with 50x leverage. The trader entered the trade at $27,774 and exited at $30,274 — a profit of $2.25 million, or 4,401%.

Despite the negative attention surrounding the incident, the community nonetheless ironically celebrated the ‘lucky Cointelegraph intern’.

Careful what you read on the internet. The best source of information about the SEC is the SEC.

— U.S. Securities and Exchange Commission (@SECGov) October 16, 2023

“Be careful what you read on the internet. The best source of information about the SEC is the SEC itself,” the regulator reacted to the situation.

According to Coinglass, in the past 24 hours the Bitcoin-derivatives market recorded liquidations of $92 million. Long positions accounted for $25 million, and shorts for $67 million.

As a reminder, BlackRock sent an application to the SEC for an investment product based on the first cryptocurrency on June 15. Following the financial giant, similar requests came from Valkyrie, Fidelity Investments, WisdomTree and Invesco.

So far, the regulator has not granted any approvals for launching spot ETFs on digital gold. The Commission has approved similar products based on futures for the first cryptocurrency from ProShares and Valkyrie Investments.

In September, SEC Chair Gary Gensler, during hearings in the United States Congress, stated that the agency continues to study the court ruling in the Grayscale case, as well as numerous applications for spot Bitcoin ETFs.