Ripple CEO Suggests SEC Should Investigate Itself After Account Hack

Ripple CEO Brad Garlinghouse, commenting on the hack of the SEC’s X account, suggested the regulator should investigate “itself.” 

Days like this remind me that 1/ the SEC should be investigating itself for multiple things 2/ crypto Twitter remains undefeated in memes.

— Brad Garlinghouse (@bgarlinghouse) January 9, 2024

“Days like this remind me that the SEC should investigate itself for numerous reasons; crypto Twitter remains undefeated in memes,” he wrote. 

Ripple’s Chief Legal Officer Stuart Alderoty also responded to the incident, referencing the agency’s cybersecurity rule from July 2023, which requires organizations to disclose details of a hacking attack.

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. https://t.co/CUs3aAunRs https://t.co/nRWAfnirb5

— Stuart Alderoty (@s_alderoty) January 9, 2024

“According to its own rules, the Commission should disclose the nature and scope of the incident, its impact on the market, and describe its processes for assessing, identifying, and preventing such threats within four days. We wait with bated breath,” noted the executive. 

Coinbase’s Chief Security Officer Philip Martin offered the SEC assistance in organizing social media cybersecurity. 

hey @GaryGensler and @SECGov, serious offer: as a crypto exchange we’ve had a lot of experience with security protocols around social media, and as a veteran and patriot I love to help my country. If you’d like any suggestions feel free to reach out. https://t.co/w3z2yU6FZw

— Philip Martin (@SecurityGuyPhil) January 10, 2024

“Serious offer: as a cryptocurrency exchange, we have extensive experience with social media security protocols, and as a veteran and patriot, I love to help my country. If you have any suggestions, feel free to reach out,” he stated.

Despite the confusion, some experts do not rule out the possibility of approving a spot Bitcoin ETF in the US on January 10. 

Bloomberg analyst Eric Balchunas celebrated “Bitcoin ETF approval day” and suggested it might occur around 4:00-6:00 PM (New York). He also shared a screenshot from the terminal featuring Bitwise’s product. 

If I was the SEC PR person I’d advise Gary to do a press conference today.. talk about the hack, ack they goofed, steps they’ve taken yada yada and then also announce ETF approvals (and the do his usual warnings on crypto) all in one shot. Done and done.

— Eric Balchunas (@EricBalchunas) January 10, 2024

“If I were the SEC PR person, I’d advise [SEC Chairman] Gary Gensler to hold a press conference today: talk about the hack, discuss the misunderstandings and steps they’ve taken, yada yada, and then also announce ETF approvals (and make his usual warnings) all in one go. Done and done,” he added. 

His fellow analyst James Seyffart noted the intensified “fee war” following ARK Invest/21Shares and BlackRock’s reduction of trading fees. 

Update: Here’s how things look in the #Bitcoin ETF fee war after moves by Ark/21Shares and BlackRock to lower their fees. pic.twitter.com/2o3J74JReD

— James Seyffart (@JSeyff) January 10, 2024

Market Reaction

The fake post from the SEC account was removed approximately 15 minutes later, but it had already triggered market volatility, with Bitcoin being the hardest hit. 

Initially, its price surged to $48,000, but after the denial, it sharply fell to $44,750. Later, the digital gold’s quotes recovered to $46,000. 

At the time of writing, the coin maintains a negative trend, with its rate momentarily dropping below $44,300. 

According to Coinglass, the crypto market saw $228 million in liquidations over the past 24 hours, with $139 million in long positions. 

Meanwhile, some altcoins remained unaffected due to possible liquidity redistribution. Ethereum rose by 4.3% over the day, briefly surpassing $2400 for the first time since May 2022. 

Tokens of L2 networks like OP and ARB gained 9.3% and 10.2% respectively. The native token of the Lido Finance liquid staking protocol (LDO) rose by 14.7%. 

Following the wave of long position liquidations, K33 analysts noted a decrease in the likelihood of sell-offs after the Bitcoin ETF approval.