SEC Hack & Fake ETF News: Ripplo CLO Demands Answers as Crypto Markets Suffer

Ripple’s Chief Legal Officer, Stuart Alderoty, has provided insights into the dynamics that led to the approval of a spot Bitcoin ETF in the United States, emphasizing the role of setbacks faced by the U.S. Securities and Exchange Commission (SEC) in various court cases.

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Industry Lashes Out at SEC

Alderoty characterized the SEC as an ‘out of control regulator,’ highlighting that legal challenges, such as the Grayscale lawsuit, influenced the regulatory environment. In the Grayscale case, a judge criticized the SEC’s arbitrary actions, contributing to a climate where the approval of a Bitcoin ETF became more feasible.

The SEC’s approach has faced criticism from figures such as SEC Commissioner Hester Peirce, who pointed out that the regulator’s actions are driving retail investors toward less efficient ways of gaining exposure to Bitcoin. Peirce also expressed concern that the SEC’s treatment of crypto-related applications is damaging its reputation and discouraging innovation in the sector.

Ripple Continues to Stand Strong

This regulatory landscape is particularly relevant to Ripple, which has been navigating legal challenges since the SEC filed a lawsuit in December 2020, alleging that the sale of XRP tokens constituted an illegal securities offering.

The recent setback for the SEC in the XRP case, where a judge ruled that XRP sales to retail buyers were not securities, further emphasizes the challenges and uncertainties surrounding the SEC’s regulatory stance in the crypto space.

An Urgent Call for Transparency

He is not only challenging the SEC’s arbitrary actions but he has also called for complete transparency from the U.S. Securities and Exchange Commission (SEC) following the recent cybersecurity breach and false Bitcoin ETF approval announcement.

Alderoty pointedly referred to the SEC’s own July 2023 cybersecurity rule, emphasizing the necessity for the regulatory body to adhere to its guidelines. He called for a detailed disclosure of the breach’s nature, its market impact, and concrete measures to prevent future incidents, underscoring the importance of regulatory transparency.

Is the SEC Damaging the Industry?

The incident has not only raised concerns about the security of sensitive information but has also sparked questions about the SEC’s decision-making authority in safeguarding investors. Despite the humorous reactions within the crypto community, the event resulted in significant financial losses for individuals affected by the false announcement.