All you need to know about SEC Fake Tweet

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The Blends Briefs
TL’DR: Here’s a sneak peek into today’s newsletter

• Everything we know about the SEC’s fake approval tweet.

• Japanese e-commerce firm Mercari to enable Bitcoin payments

• Turkey to complete a technical study for Crypto Regulations. 

• Dictionomics: Crypto losses

Global Biscuits

Everything we know about the SEC’s fake approval tweet.

The official Twitter account of the U.S. Securities and Exchange Commission (SEC) was compromised, leading to the posting of a false tweet claiming that the SEC had approved the listing and trading of spot bitcoin exchange-traded products (ETFs). The tweet caused a brief spike in the price of Bitcoin, reaching $47,680.10 before retracing gains. SEC Chair Gary Gensler quickly debunked the news, stating that the SEC had not approved any spot bitcoin ETFs. The SEC later issued a statement confirming that its Twitter account had been compromised and the unauthorized tweet was not made by the SEC or its staff.

The SEC and Twitter have both investigated the fake tweet from the @SECGov Twitter account that claimed the approval of spot Bitcoin exchange-traded products. The SEC clarified that the tweet was fake and stated that there was unauthorized access to the account, which has now been terminated. The SEC will work with law enforcement to investigate the matter. Twitter also conducted its own investigation into the incident.

As per the investigation, Twitter stated that the compromise was not due to a breach of its systems but was the result of an individual obtaining control over a phone number associated with the @SECGov account through a third party. The SEC's account did not have two-factor authentication (2FA) enabled at the time of the hack. Twitter encouraged all users to enable 2FA for an extra layer of security.

As a result, US Senators JD Vance and Thom Tillis have written to SEC chair Gary Gensler, expressing concern and seeking clarity regarding the fake tweet from the SEC's Twitter account. The Senators raised serious concerns about the SEC's cybersecurity procedures and demanded an explanation for how the fake announcement occurred. They also asked about the SEC's plans to investigate the error and rectify any financial losses borne by investors as a result of the misleading tweet. 

Tastes of the regions

Japanese e-commerce firm Mercari to enable Bitcoin payments
Japan's e-commerce giant Mercari is reportedly planning to enable users to purchase products using Bitcoin by June 2023. The online marketplace, with over 22 million monthly active users, has already launched an in-app Bitcoin exchange through its Tokyo-based blockchain subsidiary, Mercoin, allowing users to buy Bitcoin using their bank account balance, sales proceeds, and free points. While prices on Mercari will still be displayed in Japanese yen, users will have the option to make payments with Bitcoin. Mercoin will act as an intermediary to transfer Bitcoin to the seller in yen, subject to the same range of fees as fiat transactions.

Turkey to complete a technical study for Crypto Regulations.
Turkey's Finance Minister, Mehmet Şimşek, has stated that the country is in the "final stage" of completing technical studies for cryptocurrency regulation. The regulatory framework aims to increase trust in the crypto sector and eliminate associated risks. Under the proposed legislation, crypto assets are broadly defined as "intangible assets that can be created and stored electronically using distributed ledger technology or a similar technology." The Capital Markets Board will oversee the licensing of crypto exchanges, subject to minimum operating conditions similar to financial institutions. The legislative proposals are expected to be ready this month ahead of the FATF evaluation in February.

Dictionomics:     Crypto losses

Crypto losses are the negative outcomes of investing in cryptocurrencies, such as Bitcoin, Ethereum, or Dogecoin. Crypto losses can occur due to various factors, such as market volatility, hacking, scams, or regulatory changes. Crypto losses can be classified into two types: realized and unrealized. Realized losses are when an investor sells their crypto assets for a lower price than they bought them. Unrealized losses are when an investor holds their crypto assets while their value decreases but does not sell them. Crypto losses can have significant financial and psychological impacts on investors, especially if they invest more than they can afford to lose or do not diversify their portfolios. 

Here are some definitions and terms related to crypto losses:

• Capital gains tax: The tax that an investor has to pay on the profit they make from selling their crypto assets.

• Capital loss carryover: The amount of realized losses that an investor can deduct from their taxable income in future years.

• Cost basis: The original value of an asset for tax purposes, usually the purchase price.

• Wash sale: A situation where an investor sells a crypto asset at a loss and buys it back within 30 days, which prevents them from claiming the loss as a tax deduction.

• HODL: A term that means holding on to one's crypto assets despite market fluctuations, hoping for a future increase in value.

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