An unconfirmed headline that the US Treasury is accusing several financial institutions of laundering money in cryptocurrency has caused chaos in the cryptocurrency market.
The headline that allegedly triggered the crash was posted by a shady Twitter account called FXHedge.
Bitcoin fell to the level of $ 51,000, and the altcoins suffered even more serious losses.
The tweet managed to wipe $288 billion off the cryptocurrency market in 54 minutes after being crawled on social media. At the time of writing, it had more than 5000 likes, despite quoting anonymous sources and disabling comments.
U.S. TREASURY TO CHARGE SEVERAL FINANCIAL INSTITUTIONS FOR MONEY LAUNDERING USING CRYPTOCURRENCIES -SOURCES
— FXHedge (@Fxhedgers) April 18, 2021
Jake Chervinsky, general counsel of Compound Finance, writes that he does not consider this tweet credible, since money laundering cases fall under the jurisdiction of the US Department of Justice. He also writes that it would be unusual to charge several financial institutions at once, and such investigations are always kept secret.
I don't find this credible. The tweet itself is fishy: Treasury doesn't charge money laundering (DOJ does) & a case against several FIs at once would be unusual. Also, criminal investigations are kept strictly confidential & rarely leak. I'm not convinced by unnamed "sources." https://t.co/71opA5cUby
— Jake Chervinsky (@jchervinsky) April 18, 2021
FXHedge has made false statements in the past, which means that its content should be treated with a high degree of skepticism.