Cardano community shaken by SEC lawsuit hoax and burn rumors

The Cardano (CRYPTO:ADA) community was thrown into panic on Sunday following fraudulent posts from the Cardano Foundation’s compromised social media account.

The fake announcements suggested significant changes to the ADA token, including halting trading and implementing token burns.

One of the posts claimed that the U.S. Securities and Exchange Commission (SEC) had filed a lawsuit against the Cardano Foundation on December 8, 2024, leading to immediate cessation of support for ADA.

“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,” read the message.

It went on to state that, in light of the legal action, all support for ADA would be halted to ensure compliance with regulatory requirements.

The post also promised further updates for ADA holders, causing significant concern in the cryptocurrency ecosystem.

The timing of the announcement raised suspicion, as it coincided with a period of heightened regulatory scrutiny in the cryptocurrency industry.

Rumors about SEC Chair Gary Gensler’s potential resignation added to the speculation, leading some to believe the posts aimed to exploit these tensions and create panic among ADA holders.

Further confusion was caused by another post from the compromised account, claiming that ADA trading would cease on all platforms by December 9, 2024, with tokens being burned and a refund process for lost investments.

“Cardano, reimagined for Solana’s speed and innovation,” this scam also promoted a fraudulent token, ADASOL.

The Cardano Foundation later confirmed that its X account had been hacked, urging the community to ignore the posts.

Despite the clarification, fears of scams and vulnerabilities lingered in the community.

At the time of reporting, the Cardano price was $1.17.