ADA Panic: SEC Lawsuit Hoax and Burn Scare Rock Cardano Community

False claims of an SEC lawsuit and ADA token burns from a hacked Cardano Foundation account sent shockwaves through the cryptocurrency community, sparking panic.

Fake SEC Lawsuit Targets Cardano Foundation: ADA Burn Rumors Spark Panic

The Cardano Foundation’s social media platform X account appears to have been compromised early Sunday morning, alarming the cryptocurrency community with false announcements. A series of posts from the account claimed sweeping changes to ADA tokens, including halting trading and token burns.

One message alleged that the U.S. Securities and Exchange Commission (SEC) had filed a lawsuit against the Cardano Foundation. “The Cardano Foundation regrets to inform our community that we have been served with a lawsuit by the U.S. Securities and Exchange Commission (SEC) on December 8, 2024,” the statement reads, adding:

In light of this unexpected legal action, we have made the difficult decision to immediately cease all support towards the ADA token to ensure compliance with regulatory requirements.

It also promised further updates to ADA holders. Both posts caused significant concern within the cryptocurrency ecosystem, sparking widespread speculation about ADA’s future and regulatory implications.

The timing of the post raised concerns, as it coincided with a period of increased regulatory scrutiny of cryptocurrencies. This was further intensified by speculation about SEC Chair Gary Gensler’s impending resignation, with claims suggesting he might be pushing certain enforcement actions before stepping down. Some speculated that the fraudulent announcements might have been crafted to exploit these regulatory tensions, aiming to sow panic among ADA holders and the broader cryptocurrency community.

The compromised X account was also used to promote a scam involving a token named ADASOL, purportedly a “Cardano, reimagined for Solana’s speed and innovation.” Another post from the Cardano Foundation’s X account states:

ADA trading will halt on all platforms as of December 9th, 2024. All ADA tokens will consequently be burned. Community members will be able to submit a refund request to account for any investment lost during the burn.

This unprecedented announcement quickly stirred confusion among ADA holders, causing the cryptocurrency’s price to dip.

However, these posts were soon revealed as fraudulent. Multiple individuals and entities reported that the Cardano Foundation’s X account had been hacked. The Cardano Community’s X account issued a statement, cautioning investors: “The Cardano Foundation X account has been compromised. Please ignore any posts from the account at this time while we address this.” Despite the clarification, social media reactions remained intense, reflecting fears of potential scams and vulnerabilities in communication channels. As of writing, ADA trades at $1.19, with the incident leaving many in the community wary of further disruptions.