The US Securities and Exchange Commission (SEC) is in a delicate position following a “compromising” event involving its X (formerly Twitter) account, which has Ripple executives demanding answers.
The account posted a false announcement stating that all spot Bitcoin ETF applications had been approved by the regulatory body, escalating concerns and demands for transparency.
Ripple Demands SEC Accountability
Ripple Chief Legal Officer Stuart Alderoty has called on the SEC to adhere to its rules, which stipulate that within four days, the regulatory body should disclose the nature and scope of the incident and its impact on the crypto market.
Ripple CLO also emphasizes describing the SEC’s processes for assessing, identifying, and preventing similar cybersecurity threats. Alderoty stated:
Per *its own rules*, w/in 4 days the SEC should disclose the incident’s nature and scope, and the impact on the market along with a description of its processes for assessing, identifying, and preventing such cybersecurity threats… We’ll be waiting with bated breath.
The call for transparency is rooted in the SEC’s own rules, introduced in July 2023, which require companies to disclose material cybersecurity incidents and describe their impact.
SEC Chair Gary Gensler, upon disclosing the rules, highlighted the importance of consistent and decision-useful cybersecurity disclosure for companies and investors alike.
The rules mandate that registrants report any material cybersecurity incident on Item 1.05 of Form 8-K within four business days of determining its significance.
The rules also introduce Regulation S-K Item 106, requiring registrants to describe their processes for managing cybersecurity risks and the oversight provided by their board of directors. These requirements apply to both domestic and foreign private issuers.
As the SEC’s deadline for disclosure approaches, the regulatory body finds itself in a similar position to numerous crypto firms that have faced demands for transparency. The “fake post” caused a ripple effect in the market, with Bitcoin’s price dropping from $46,600 to $45,000.
Senators Condemn SEC’s Handling Of Fake Bitcoin ETF Post
Ripple CEO Brad Garlinghouse expressed his frustration with the situation, suggesting that the SEC should investigate itself for multiple matters. This sentiment reflects the growing discontent and lack of trust in the regulatory body’s handling of the incident.
Adding to the pressure on the SEC, Senators J.D. Vance and Thom Tillis have demanded an explanation for the agency’s erroneous announcement of the approval of spot Bitcoin ETFs.
The senators deemed the SEC’s error unacceptable, particularly given its role as the regulator of the world’s capital markets.
As the SEC faces mounting scrutiny and demands for transparency, the cryptocurrency industry and market participants eagerly await the disclosure of the incident’s details and the regulatory body’s response.
The outcome of these developments will impact the SEC’s reputation and the broader perception of regulatory oversight in the crypto space.
Featured image from Shutterstock, chart from TradingView.com