Ripple Legal Team Demands SEC’s Disclosure Of Fake Bitcoin ETF News
The crypto community was thrown into a celebration mood after the United States Securities and Exchange Commission reportedly announced the approval of the much-anticipated spot Bitcoin Exchange-Traded Fund. However, to the utter surprise and confusion of everyone, SEC Chairman Gary Gensler issued a warning shortly after the first announcement, vehemently denying the approval of the Bitcoin ETF by the commission and claiming their official Twitter (X) was hacked.
The incident happened on Tuesday when a post falsely claimed that the SEC had endorsed the launching of the spot Bitcoin ETF. Nonetheless, Gensler, the SEC chair, debunked the news while claiming an unauthorized person had breached the commission’s account on X to confuse the public.
Following the mishap, the US SEC has found itself facing queries from different angles concerning the reported security breach as many critics questioned the credibility of the commission. Ripple Labs’ legal team reportedly called for the SEC to be transparent while disclosing the cause of the incident.
Ripple Lawyer Demands Transparent Disclosure From SEC
In addition, Ripple Labs’ Chief Legal Officer, Stuart Alderoty, reacted to the case swiftly, demanding that the SEC has to disclose the scope and nature of the incident alongside the potential effect it has on the financial markets. He reportedly used the SEC’s rules as the basis for his demands as he shared a link to the regulations of the commission that address cybersecurity risk management and disclosure of related cases via his recent tweets.
Furthermore, the report showed that Alderoty is not the only party with a sense of urgency in addressing the issues as it stated that the SEC is fully committed to disclosing material cybersecurity issues such as this. Moreover, the rules that were recently implemented under the tenure of Chairman Gensler mandated firms and organizations registered under the commission to promptly publicize any material cybersecurity emergency.
SEC To Explain The Incident To The Public
According to the regulation, affected firms must comprehensively describe the nature of the incident, its timing, scope as well as potential effects. More importantly, registrants have a deadline of four business days after the incident to determine and publicize the significance of the incident. However, in a case where the public disclosure of the incident may pose a significant risk to public safety and national security, registrants are exempted from the obligated disclosure.
In this case, the breach and false announcement of spot Bitcoin ETF endorsement have raised eyebrows concerning how secure and credible the communication system of the SEC is as well as the potential risks such an incident may expose the US financial markets to.
Furthermore, given that the SEC plays a core role in regulating financial markets in the US, the security breach on its Twitter page is quite a significant issue that bothers everyone. Moreover, the false information disseminated can hugely influence investors’ sentiments and market reactions, consequently causing unwanted price fluctuations, and many unlucky crypto users who acted on the false news may lose their liquidity.
SEC Committed To Disclosure
Nonetheless, the swift reaction of SEC Chairman Gary Gensler to debunk the news publicly depicts the commission’s dedication to upholding the integrity and transparency of its regulatory policies and processes. But, it also showed that the communication channels of the commission have a weak security system that can be easily manipulated by an unauthorized fellow.
Meanwhile, Stuart Alderoty’s demand for public disclosure on the matter is rooted in the commission’s regulations which place priority on accountability and transparency amid cybersecurity cases. Through the deadline stipulated, Alderoty plans to obligate the SEC to obey its regulations.
Nonetheless, the report revealed that while the SEC made its intention to adhere to its regulations by promptly disclosing the necessary information to the public, it, however, pointed out that the current development may be exempted from public display, as some perspective if the incident involved sensitive data that could expose the national security system to risk.
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