XRP’s ‘Bad Look’ at Hacks Won’t Hinder SEC’s ETF Approvals
Nov 13 XRP (XRP) Price action from BlackRock's XRP trust filing should not sway the US securities regulator's decision to approve or delay Bitcoin (BTC) exchange-traded funds (ETFs) — but it's not a good look, industry observers say.
The Securities and Exchange Commission has previously said it is possible to manipulate the Bitcoin market and will knock down the Bitcoin ETFs space, citing a lack of market manipulation oversight.
Bloomberg ETF analyst Eric Balchunas told Cointelegraph that the fake XRP filing should have no bearing on the SEC's final decision.
“We doubt that this will affect the situation on the spot Bitcoin ETFs,” said Balchunas. However, he added that the incident could prove the SEC's confidence.
“There's no doubt that it's a bad look that justifies the ‘fraud and fraud' that the SEC has used to get past rejections.”
A November 13 listing on the Delaware Corporations website showed BlackRock creating the “iShares XRP Trust” — a prerequisite for launching an ETF.
XRP rallied 12.3% in 30 minutes before quickly pulling back after the filing was dismissed as a hoax by Balchunas and others, and others received BlackRock confirmation from a man who appeared to be managing director Daniel Schwiger.
Michael Basina, partner at law firm Piper Alderman and chairman of industry group Blockchain Australia, told Cointelegraph he would be “surprised” if the SEC took advantage of the incident to postpone ETF applications.
“Such independent rumors cannot be considered to provide a legal basis for delaying ETF applications that have already been considered, particularly where they are already subject to deadlines.”
The volume of fakes, rumors and dare attempts regarding ETF news for #Bitcoin, $XRP, $ETH, $SOL and more is enough to negate all applications currently pending.
This is not a fair market. It is not a fraudulent flea market. The SEC needs to crack down on it.
— Parrot Capital (@ParrotCapital) November 14, 2023
Lucas Kiely, CEO of wealth management platform Yield App, said the fake XRP filing won't bother the SEC and the crypto community needs to “keep calm.”
“It is unlikely that this event will have any role in this decision,” said Keely Sa.
Many X (ex-Twitter) pundits post scary headlines to grab audience attention and “disrupt the market.”
“Overall, this is a stable and sustainable period for the industry and mild entertainment for Black Rock.”
XRP File Could ‘Easily Undermine' ETF Efforts
The SEC has rejected several Bitcoin ETFs in the past over claims that investors are not “protected from fraud and fraudulent practices and practices,” according to James Edwards, an Australian fintech firm's crypto analyst.
There's no reason to discount that attitude, Edwards said.
Related: Bitcoin ETFs US shares crypto ETF trade volume to push to 99.5% – analyst
“Unfortunately, events like this could easily derail efforts to launch a Bitcoin ETF in the US,” Edwards said.
“The onus will be on ETF applicants like BlackRock to demonstrate that they can protect clients from market manipulation and fraud, which is difficult given the opaque nature of crypto markets.”
The fake XRP trust filing will be forwarded to the Delaware Department of Justice for further investigation.
Latest on Fake XRP ETF File: “Our only recommendation is that this matter be referred to the Delaware Department of Justice,” said a spokesperson (Delaware Dept. of State). Curse. Someone outside is peeing his pants as we speak.. https://t.co/Xea226Q1vT
— Eric Balchunas (@EricBalchunas) November 14, 2023
BlackRock is awaiting regulatory approval for the Spot Ether ETF on Nov. 9, in addition to the Bitcoin ETF that was listed in June.
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