The Nov. 13 XRP (XRP) price action stemming from a falsified BlackRock XRP trust filing is unlikely to influence the U.S. securities regulator’s decision to approve or delay Bitcoin exchange-traded funds (ETFs) (BTC) spot – but that’s not the case. a good insight, industry observers say.
The U.S. Securities and Exchange Commission has previously claimed that the Bitcoin market could be manipulated and delisted Bitcoin spot ETFs, citing lack of controls over market manipulation.
Bloomberg ETF analyst Eric Balchunas told Cointelegraph that the fake XRP filing is expected to have little to no impact on the SEC’s final decision.
“We doubt this will have an impact on the spot Bitcoin ETF situation,” Balchunas said. However, he added that the incident could validate the SEC’s beliefs.
“There is no doubt that this is a bad image that arguably validates the ‘fraud and manipulation’ that the SEC has used as a reason for past denials.”
The Nov. 13 filing on the Delaware List of Companies website showed BlackRock creating the “iShares XRP Trust,” a precursor to launching an ETF.
The deposit sent XRP up 12.3% in 30 minutes before falling just as quickly once the deposit was labeled a hoax by Balchunas and others who received confirmation from BlackRock that the deposit had been made by someone posing as its CEO, Daniel Schwieger. .
Michael Bacina, 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 defer ETF applications.
“An isolated rumor like this is unlikely to provide a legal basis for delaying already considered ETF applications, particularly when they are already subject to deadlines,” he said.
It’s not a real market.
It’s a fraudulent flea market.
The SEC should hammer it.
– Parrot Capital (@ParrotCapital) November 14, 2023
Lucas Kiely, CEO of wealth management platform Yield App, said the fake XRP deposit would not influence the SEC and stressed that the crypto community should “calm down.”
“It is highly unlikely that this incident played a role in this decision,” Kiely said.
He reiterated that many pundits on X (formerly Twitter) published alarmist headlines to attract public attention and “usurp the markets.”
“Overall, this is a ‘keep calm and carry on’ moment for the industry and probably some mild amusement for BlackRock.”
XRP deposit ‘could easily undermine’ ETF efforts
The SEC has rejected several spot Bitcoin ETFs in the past, saying investors are not protected from “fraudulent and manipulative acts and practices,” says James Edwards, a crypto analyst at Australian fintech company Finder.
There is no reason to suggest that this would undermine that view, Edwards said.
Related: Bitcoin ETFs to Push US Share of Crypto ETF Trading Volume to 99.5% – Analyst
“Unfortunately, events like these could easily undermine efforts to launch a Bitcoin ETF in the United States,” Edwards said.
“The onus will be on ETF applicants like BlackRock to demonstrate that they are able to somehow protect their clients against market manipulation and fraud, which is difficult given the opaque nature of the markets of cryptography.”
The fake XRP trust case will be referred to the Delaware Department of Justice for further investigation.
LATEST ON FALSE XRP ETF DEPOSITS: “Our only comment is that this matter has been referred to the Delaware Department of Justice,” the (Delaware Department of State) spokesperson said. Condemn. Someone outside is shitting their pants as we speak. https://t.co/Xea226Q1vT
– Eric Balchunas (@EricBalchunas) November 14, 2023
BlackRock filed for a spot Ether ETF on November 9. It is now awaiting regulator approval in addition to its spot Bitcoin ETF filed in June.
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