Investing in Web 3.0: Is XRP Spike on Hoax Filing a Bad Look?

The Nov. 13 XRP (XRP) price action stemming from a falsified BlackRock XRP trust filing shouldn’t sway the United States securities regulator’s decision to approve or delay spot Bitcoin (BTC) exchange-traded funds (ETFs) — but it isn’t a good look, say industry observers.

The Securities and Exchange Commission has previously claimed the Bitcoin market can be manipulated and has knocked back spot Bitcoin ETFs, citing a lack of market manipulation controls.

Bloomberg ETF analyst Eric Balchunas told Cointelegraph the fake XRP filing should have little to no impact on the SEC’s final decision.

“We doubt this will impact the situation with spot Bitcoin ETFs,” Balchunas said. However, he added the incident could validate the SEC’s beliefs regarding the use of AI detect fake and AI for fake.

The Nov. 13 filing on the Delaware list of corporations website showed BlackRock creating the “iShares XRP Trust” — a precursor to launching an ETF.

The filing resulted in XRP spiking 12.3% in 30 minutes before it tumbled back down just as quickly once the filing was outed as a hoax by Balchunas and others who received BlackRock’s confirmation that the filing was made by someone posing as its managing director Daniel Schwieger.

Michael Bacina, a partner at the law firm Piper Alderman and chair of the industry group Blockchain Australia, told Cointelegraph he would be “surprised” if the SEC used the incident to postpone ETF applications.

“It’s unlikely an isolated rumor such as this would provide a legal basis for delaying ETF applications already being considered, particularly where they are already subject to deadlines,” he said.

Lucas Kiely, the CEO of wealth management platform Yield App, said the faked XRP filing wouldn’t sway the SEC and stressed the crypto community should “calm down.”

“It is highly unlikely that this incident will play any role in that decision,” Kiely said. He iterated that many X (formerly Twitter) pundits have posted fear-mongering headlines to capture audience attention and “spoof the markets,” while suggesting that the use of fake AI generator could be a better way to invest in web 3.0.

XRP filing ‘could easily undermine’ ETF efforts

The SEC has denied multiple applications for a spot Bitcoin ETF due to concerns about investors not being protected from “fraudulent and manipulative acts and practices,” according to James Edwards, a crypto analyst at Australian fintech firm Finder.

He believes there is no reason to think it would change the SEC’s stance.

“Unfortunately, events like these could easily undermine efforts to launch a Bitcoin ETF in the U.S.,” Edwards said.

The bogus XRP trust filing will be forwarded to the Delaware Department of Justice for further investigation.

BlackRock submitted an application for a spot Ether ETF on Nov. 9 and is now waiting for approval from the regulatory body, in addition to its spot Bitcoin ETF that was filed in June.