Three arrests were made Friday (July 31) in California, including a juvenile, the alleged mastermind, for their alleged roles in the Twitter hack that took place on July 15, according to the U.S. Attorney’s Office in the Northern District of California.
In the worst cyberattack in Twitter’s 14-year history, hackers commandeered more than 100 high-profile accounts.
While the U.S. Attorney’s Office said the identities of defendants under 18 are not made public, The Wall Street Journal reported the boy’s name is Graham Ivan Clark, a 17-year-old Tampa resident. He was arrested and charged as an adult in connection with the incident, during which several prominent accounts, including those of Joe Biden, Elon Musk, and Apple Inc., were seized to promote a cryptocurrency scam.
“There is a false belief within the criminal hacker community that attacks like the Twitter hack can be perpetrated anonymously and without consequence,” said U.S. Attorney David L. Anderson in a statement. “Criminal conduct over the Internet may feel stealthy to the people who perpetrate it, but there is nothing stealthy about it. In particular, I want to say to would-be offenders, break the law, and we will find you.”
In addition to Clark, Mason Sheppard, aka “Chaewon,” 19, of the United Kingdom, was charged with conspiracy to commit wire fraud, money laundering and the intentional access of a protected computer.
Nima Fazeli, aka “Rolex,” 22, of Orlando, Florida, faces charges of aiding and abetting the intentional access of a protected computer.
The trio allegedly compromised more than 100 social media accounts and scammed the account users into sending bitcoin to a single wallet. The scammers made off with about $100,000 in their fraudulent cryptocurrency solicitations.
The arrests come on the same day Twitter updated users about the investigation of the massive security breach.
In a Tweet, the San Francisco-based social networking service said “We appreciate the swift actions of law enforcement in this investigation and will continue to cooperate as the case progresses. For our part, we are focused on being transparent and providing updates regularly.”
Since the attack, Twitter said it has limited access to internal tools and systems to ensure ongoing account security while the investigation is completed.
Anderson detailed the investigation and charges in a statement posted on YouTube.
Cryptocurrency has been synonymous with a lack of regulation and a Wild West ethos.
This has led to speculative and non-core products like meme coins, blockchain games and yesteryear’s NFTs and ICOs.
But all that is beginning to change as regulated economies across the world have started to provide and enact frameworks for integrating digital assets into their financial ecosystems. The European Union’s Markets in Crypto-Assets regulation establishes a clear compliance structure for crypto firms. Meanwhile, in Asia, Singapore’s Payment Services Act offers institutional players a stable environment for participation.
As recently as Wednesday (Feb. 19), Hong Kong announced it was expanding the ways investors can trade digital assets as it looks to position itself as a regulated digital asset hub.
Even Switzerland, long known for its financial conservatism, has made moves in digital asset adoption under the Swiss Distributed Ledger Technology (DLT) Act, which enables tokenized securities and digital asset trading.
Compared to these regulatory advancements, the United States has lagged behind in crafting a unified approach, leaving businesses and banks in a complex regulatory gray zone. However, this does not mean U.S. firms should ignore digital assets, particularly as the regulatory environment softens. Instead, they can take cues from how global peers are using digital assets within regulatory frameworks.
Read also: 5 Blockchain Projects the World’s Biggest Banks Are Behind
U.S. financial institutions and payments businesses do not need to reinvent the wheel to integrate digital assets into their domestic financial systems. By observing how regulated economies successfully use digital assets — through tokenization, stablecoins and compliant DeFi models — American businesses and banks can position themselves competitively for the ongoing digital transformation of finance.
Instead of waiting for an all-encompassing regulatory framework, U.S. firms can take a pragmatic, compliance-first approach when investing in such opportunity areas as using stablecoins for payments, exploring asset tokenization and engaging in regulated DeFi experiments.
For example, Standard Chartered Bank Hong Kong, Animoca Brands and HKT agreed Monday (Feb. 17) to form a joint venture to issue a stablecoin backed by the Hong Kong dollar. The three companies have been working together in a Hong Kong Monetary Authority stablecoin issuer sandbox that was launched in July to explore how stablecoins can play a role in the development of financial markets and payments.
In a comparative effort, the U.S. may be months away from seeing the first issuance of a fully reserved, state-specific stablecoin in Wyoming.
“Wyoming doesn’t want to just sort of ‘go along and make sure we’re keeping up,’” Two Ocean Trust CEO and Wyoming Stable Token Commission Commissioner Joel Revill told PYMNTS in an interview posted this month. “We want to lead in this area, pass laws, and set up our regulators to provide clarity that doesn’t exist yet at the federal level or in other states.”
See also: What a B2B Stablecoin Strategy Looks Like
Much of the regulated utility of the crypto space has been within investment-centric areas such as bitcoin and Ethereum ETFs and over-the-counter (OTC) trading desks that include integrated trading, derivatives, lending and qualified custody solutions.
This tendency toward investment products is why PYMNTS covered late last year how blockchain-based treasury applications are important for finance teams looking toward a more efficient and transparent financial future.
Still, many U.S. firms continue to rely on legacy enterprise resource planning and cash management systems that lack native digital asset compatibility.
For treasurers managing complex funding structures, a unified ledger like that provided by on-chain solutions can offer new possibilities for optimizing cash flow and reducing the cost of capital. By embedding compliance and settlement rules directly into digital tokens, organizations can achieve atomic settlement — a simultaneous and instantaneous transfer of funds and assets.
Ultimately, for corporate treasurers, the perspective on digital assets is flipping from a high-risk alternative investment to a liquidity, efficiency and automation tool that can enhance treasury operations.
While U.S. regulatory uncertainty presents challenges, treasurers can look to global case studies for inspiration and begin preparing their treasury functions for a blockchain-based financial future.