Ryze Recap 7/16: Bitcoin Unaffected by Twitter Hack
Plus, Grayscale Sees ~$1B Inflows in Q2, and SEC Cracking Down on an ICO.
It’s Thursday, July 16. If you're new here— Ryze Recaps is a newsletter covering the biggest news Bitcoiners need to know in 2 mins or less.
We've got one main story for you today, and it isn’t so much about what happened as it is what didn’t happen.
Bitcoin Unaffected by Twitter Hack
Dozens of high-profile verified Twitter accounts were compromised yesterday. Attackers tweeted out a similar message from all accounts, stating that if Bitcoin was sent to an address, a larger amount would be sent back to the sender’s address as a way to “give back” to the community.
It started with a Bitcoin-focused Twitter account (@AngeloBTC), spreading to crypto exchange accounts, all the way to accounts as ubiquitous as Elon Musk’s, for a total of at least 28 verified and exchange accounts. The hackers were only able to make away with 12.86 Bitcoin, or roughly $120K— a small loot for hacking one of the largest social networks on the planet.
Why it matters:
By and large, Bitcoin was completely unaffected. Price only reflected a continuation of the low volatility we've seen over the past several weeks. Bitcoin's volatility as at an all-time low, which is great for long-term investors and the digital gold narrative, but unfavorable for traders looking to find profit in volatile markets. This is a stark contrast to 2017 and 2018, when every time Bitcoin was in mainstream news, we saw significant price volatility.
At the end of the day, this was a Twitter scam, not a cryptocurrency scam. Some accounts reportedly requested Cash App payments, not just Bitcoin. Incidents like this, when incorrectly portrayed as a “crypto scam” by legacy media, defile the industry's image for everyday consumers.
The paltry sum of money that the hacker(s) got away with makes one believe that this wasn't about the money in the first place. After all, the subset of people who know enough about Bitcoin to be able to send some to an address, but haven't come across a similar "send crypto here, we'll send more back" scam before, is likely very small. But we'll leave that speculation to the New York Times.
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A few more quick things:
Grayscale Hits Record Inflows, Again: Crypto's largest asset manager, Grayscale, has seen $905.8 Million in new investment in Q2 2020, almost doubling its previous record of ~$500M from Q1. Around 83% of this money flowed into Grayscale's Bitcoin Trust, and Grayscale now manages over $4 Billion in crypto-assets. This is a product of growing institutional interest in Bitcoin, as Grayscale reports that over 84% of its new investors were primarily hedge funds.
SEC Cracks Down on ICO: A 61-year old political lobbyist, Jack Abramoff, was found guilty of wire fraud after he defrauded over 2400 investors in a 2017-2018 ICO for a project called "AML BitCoin," and the SEC is coming after him for securities violations as well. Abramoff profited over $5M from the ICO. This isn't the first ICO that has been prosecuted by the federal government, but we'll be watching closely to see if the government pursues heavy sentencing and jail-time, or just a slap on the wrist. So far, most precedent for ICO cases has leaned towards the latter, with Block One infamously having to pay just $24M after a $4 Billion ICO for its token EOS.
That's all for today! We'll be back again with another Ryze Recap.