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Crypto investors want to sue the SEC and Gary Gensler for market manipulation

Market and Events: Crypto investors want to sue the SEC and Gary Gensler for market manipulation

Several individuals within the crypto community are preparing legal action against Gary Gensler, the head of the U.S. Securities and Exchange Commission (SEC), and the SEC itself, alleging market manipulation.

The allegations stem from a false report regarding the approval of a spot bitcoin-ETF in the United States. This report was posted on the SEC's microblog on January 9, 2024, by unknown individuals.

One of the individuals involved in this legal action is Ran Newner, a crypto investor and co-founder of Onchain Capital. Newner shared his intention to sue the SEC and Gensler with his followers on his microblog.

AltcoinGordon, a popular analyst within the crypto community, also expressed their intention to take legal action against the SEC and Gensler in the comments section of Newner's post. It is speculated that these individual lawsuits may be consolidated into a class action lawsuit against the SEC.

The basis for these legal actions against the SEC and Gensler is the dissemination of false information regarding a spot bitcoin-ETF. The announcement of the launch of this instrument was published on the SEC's microblog on January 9, 2024, but was removed twenty minutes later. SEC officials and Gensler attributed this incident to a hacking of the regulator's account, highlighting the absence of two-factor authentication as a vulnerability.

The publication of the false news about the spot bitcoin-ETF and the subsequent denials caused significant market turmoil. Traders who suffered losses due to this false information voiced their complaints online.

Ironically, the SEC had previously advised market participants to rely solely on information published through its official sources. However, as this fake news incident demonstrated, following this advice resulted in substantial losses for many traders.

Despite the confirmation of the SEC account hacking by Team X, a significant portion of the crypto community remains skeptical. According to a poll conducted by Bloomberg analyst Eric Balchunas, 83% of online users do not believe the Commission's explanation.

They suspect that the announcement about the approval of spot #bitcoin-ETFs was actually authored by the SEC commissioners themselves. Various theories, including the possibility of an incorrect publication date, have been put forth to explain the retraction of the announcement. Former US Assistant to the President for Communications, Anthony Scaramucci, has expressed support for these theories.

Another theory suggests that the fraudsters responsible for the fake news had access to pre-prepared posts by the SEC team.

This situation highlights the irony of the SEC, an organization responsible for regulating market manipulation, being accused of being the biggest manipulator itself. Members of the crypto community believe that the #SEC should be held accountable for their actions.

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