CRYPTO MOVERS AND PRICES
Crypto is on balance marginally lower this morning.
CRYPTO STORY OF THE DAY
At about 3:00 p.m. yesterday, Binance appears to have become the first of several dozen high profile twitter accounts to become compromised and tweet one of several scams attempting to deceive users to send Bitcoin (BTC) to a provided wallet. What is a Twitter issue unfortunately implicated crypto. That said, it does legitimately demonstrate a current deficiency of the crypto ecosystem vs. fiat.
Compromised accounts extended beyond crypto with Barack Obama, Joe Biden, Kim Kardashian, Apple and other public figure accounts sending out the scam tweets. Most of the deceptive tweets invited users to send BTC to an address in order to have the amount doubled and sent back. For example, Bill Gates’ account tweeted “Everyone is asking me to give, back, and now is the time. I am doubling all payments sent to my BTC address for the next 30 minutes,” along with the address. An early tally indicated that the attack’s perpetrators received about USD 109,000 equivalent of BTC.
About 3 hours after the first tweets went out, Twitter froze all verified accounts, seemingly preventing further tweeting of the scam. Late in the evening, Twitter provided an initial assessment of the event. Twitter described the hack as a, "Coordinated social engineering attack by people who successfully targeted some of our employees with access to internal systems and tools." Prior to the assessment’s release Vice reported that “Two sources close to or inside the underground hacking community provided [us] with screenshots of an internal panel they claim is used by Twitter workers to interact with user accounts.”Vice published the alleged screenshots. CoinTelegraph staff suggested they had been contacted by the alleged hackers who showed similar screenshots. The attack drew responses from U.S. politicians, with Senator Josh Hawley sending Jack Dorsey a letter asking if the President’s account was threatened.
The deceptive tweets are being commonly referred to as part of a “Bitcoin scam’’ in the press. With this being the first many will have heard mention of crypto in some time, it’s clearly bad PR for the space. The scam itself doesn't appear to have been all that harmful and many have commented that with such credentials, the perpetrators could have done much worse. That said, it does highlight what remains one of the main benefits the fiat system has over crypto for payments. First, there remains little recourse in crypto when making wallet-to-wallet transfers. While wires can be called back if sent incorrectly, and banks can internally police the matter, there’s no such well-established mechanism in crypto. Furthermore, while such scams can in fact be done with fiat, it would likely involve a victim sending a wire to an unknown bank in a foreign jurisdiction. This is likely to send off red flags and make it less likely victims comply. In crypto, wallet addresses aren’t differentiated and so such heuristics don’t exist. This dynamic is likely to find a solution from crypto innovators. For now, it remains one of the more daunting elements of the space.