You might think being part of the worst hack in Twitter’s history would be a blight for Bitcoin and other cryptocurrencies, which were already associated with scams, grifts, and general sketchiness. Or, if you happen to own some, you might see it as a vindication.
On Wednesday afternoon, a hacker or hackers hijacked dozens of the platform’s most prominent accounts—including those belonging to Bill Gates, Jeff Bezos, Barack Obama, and Kanye West—to disseminate a Bitcoin scam. For hours, these celebrity accounts posted the same message promising to double peoples’ returns if they sent $1,000 in Bitcoin to a wallet. The scam eventually netted the hackers $120,000, a relatively paltry sum given the number and visibility of the accounts that they were able to access. The FBI has launched an investigation into the hack, as has the state of New York.
In the aftermath of the hack—which caused wider disruptions on Twitter, including the temporary suspension of every verified user’s ability to tweet so that the company could contain the chaos—the cryptocurrency community has been careful to frame the incident as a Twitter problem, not a Bitcoin one. Preston Byrne, a partner at the law firm Anderson Kill who focuses on cryptocurrency, acknowledges that the hack could deepen Bitcoin’s shady public image, but he contends it’s unfounded. “The reality of the situation is that committing a crime with Bitcoin is an extraordinarily stupid idea, given the fact that no transactions are private, the ledger is auditable, and U.S. law enforcement has the ability to trace these transactions with a very high degree of accuracy,” Byrne said, adding that this was a financial scam that could’ve involved any type of currency. “Someone could have perpetrated it with U.S. dollars, with checks in the mail. It just happens that we live in a digital age, so it was perpetrated on a digital platform with digital money.” Scandals in the Bitcoin space like the theft of $460 million from the Mt. Gox exchange platform in 2014, pump-and-dump schemes, misleading cryptocurrency ads, and the use of cryptocurrency for illicit activities like narcotics purchases have earned the technology a dubious reputation, even as it has attracted the attention of mainstream financial institutions and Facebook...
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