June 23, 2024

The crypto space has been anticipating the approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC). Surprisingly, a quasi-post declaring the approval of all spot Bitcoin ETFs appeared on the regulator’s official X account.

This announcement sparked reactions among Ripple executives and other crypto personalities, with some asking the securities regulator to release a report based on its 2023 cybersecurity rules.

Fake SEC’s Approval of Spot Bitcoin ETF Applications

On January 9, a post came from the SEC’s official X account, stating that the agency has approved all Bitcoin ETF applications.

The news generated a buzz within the crypto community, with many initiating bitcoin transactions, pushing the asset from $45,000 to the $47,000 threshold, according to CoinMarketCap data.

Bitcoin even hit a daily high of $47,893. However, the favorable price rally couldn’t last long as the SEC’s chair, Gary Gensler, debunked the approval news.

Gensler issued a counter announcement, claiming the SEC’s official account was compromised, resulting in the deceptive BTC ETF approval announcement.

The SEC chief maintained that the commission has yet to approve any spot Bitcoin ETF applications on its desk. 

Moreover, X released a statement announcing the compromise of the SEC’s account, noting that any vulnerability in its systems didn’t cause the breach.

X stated:

Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number associated with the @SECGov account through a third party.

However, Gensler’s debunk arrived late as the spurious announcement created enormous losses for some market participants. Data from the crypto market analytics firm Santiment revealed that the fake news led to the liquidation of over $300 million in BTC investments.

Ripple Executives React To The Saga

Notably, some Ripple executives reacted to the events surrounding the SEC’s fake announcement. Brad Garlinghouse, the CEO of Ripple, mentioned that the incident reflects the need for the SEC to investigate itself over several things.

Also, he commended Crypto Twitter for possessing great memes.

Similarly, Stuart Alderoty, Ripple’s Chief Legal Officer (CLO), reacted to the fake news. While responding to Gensler’s statement, Alderoty called out a cybersecurity rule the SEC adopted in July 2023.

According to the cybersecurity rule, the SEC mandates the disclosure of cybersecurity incidents from companies within four working days.

Based on the commission’s recent X event, Alderoty indicated that the SEC could follow its set rule. This means that the regulator should disclose the nature and extent of the incident and its market impact within the same period. 

Further, the CLO mentioned that the commission should also reveal its plan to evade a reoccurrence in the future.

On his part, David Schwartz, Ripple CTO, used X popular trending term “How It Started Vs. How It’s Going” in his reaction.

The lawyer added a screenshot of the SEC’s October 2023 tweet, where the commission claimed its official account is a reliable source of information about its operations. 


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