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Their whole point on the stock market is this: > The big issue with all of these is that it’s very difficult to participate in the stock market anonymously. Th

Their whole point on the stock market is this: > The big issue with all of these is that it’s very difficult to participate in the stock market anonymously. The SEC has all sorts of monitoring in place to catch more common forms of insider trading and fraud and you can guarantee that they would conduct a long, thorough investigation into a hypothetical hack-based market fraud. Unlike Bitcoin transactions, wire transfers and stock purchases can be reversed after the fact, and the exposure and risk go way up when you’re actually working with US dollars. But this is divorced from reality. In reality you'd be one of thousands of people holding HTZ calls or TSLA puts in your Robinhood account. You could make a huge payday and be indistinguishable from the crowd. With the crypto scam, one person will eventually have to turn this BTC into fiat. With market manipulation, you've made thousands of retail investors indistinguishable from yourself rich. Which one sounds like a better idea?

jamiequint 6y ago
Anonymizing BTC is a lot easier than hiding from the SEC. There are that many people holding massive amounts of short-term TSLA options (enough to make >$500k on a single day movement) that the SEC can't look at each of them.
- Sebb767 6y ago
  I highly doubt that the SEC wouldn't put the required resources into this. After all, this would've caused tens of millions in damages, rather than the mediocre 100k$. Also, you could filter for new traders and traders overly invested in TSLA. Giving the rather mediocre execution (i.e. single Bitcoin address), I doubt the attacker had a lot of time and capital upfront to hide in these masses. Lastly, stock market transactions can be paused and are reversible - there's a good chance of a circuit breaker hitting or a reversal happening with that blatant market manipulation.
  - JumpCrisscross 6y ago
    > the SEC wouldn't put the required resources into this Keep in mind that a lot of the SEC's enforcement breadth comes from brokers' compliance departments. Any time anyone makes an unusual profit around corporate actions, the SEC basically requires a thorough investigation by the broker's compliance staff.
    - Sebb767 6y ago
      That's exactly what I said :) > I highly doubt that the SEC wouldn't put the required resources into this I doubt they would not -> I think they would
  - michaelt 6y ago
    When Musk posted a tweet 'joking' about taking Tesla private, which was utterly trivial to investigate, the SEC only managed to deliver a slap on the wrist. Not sure I agree they'd have investigated thousands of people.
    - AndrewBissell 6y ago
      Musk is in one class of people, people who for the most part are completely beyond consequences for things like financial crimes, fraud, or even causing mass death (as in the case of the Sacklers and the opioid crisis). You and I and yesterday's Twitter hacker are not in this class.
    - ZachPruckowski 6y ago
      >When Musk posted a tweet 'joking' about taking Tesla private, which was utterly trivial to investigate, the SEC only managed to deliver a slap on the wrist. Because prosecuting Elon Musk requires going up against top tier defense lawyers and proving things like "Musk tweeted this with the intention of impacting his stock's value" or something. With hackers, you can use the financial stuff to target the hackers, and then either (a) prove the computer crimes or (b) use the computer crimes and the surrounding stock sales to prove intent. You also don't have to go up against a legal defense better funded than some militaries.
  - kbenson 6y ago
    Also, getting away with an event like that hurts confidence in the stock market as a whole. It's not not purely about immediate damages to people in the market, it's also about how willing people are to participate in the future. A fraction of a percent of less people participating or slowing activity likely amount to many multiples of the damages from this event. The SEC would be extremely motivated to find these people to make an example of them so others think twice in the future.
- ysris 6y ago
  The SEC can look at each of them. Compliance and suspicious trading activity mechanisms put in place by financial actors are very sophisticate. Analyze millions of trades and make reports out of it is not a big deal. I wouldn't be surprised if SEC is already analyzing trades related to stocks impacted by this hack.
  - toephu2 6y ago
    You think the government is that efficient (or cares)?
    - user5994461 6y ago
      Yes. The hacked accounts include the likes of Trump, Obama, Elon Musk, Bill Gates. Bet they will push to track down who did it.
eschulz 6y ago
Why not both?
tobylane 6y ago
You probably have to give Robinhood information about yourself for anti money laundering legislation. I don’t use them, but I had to give my birthplace and National Insurance (UK’s SSN) because of the latest round of aml law.
shadowgovt 6y ago
The FBI has some very effective ways to pick faces out of the crowd once there's real money on the line. One of the advantages of using BTC for this attack is that as a stateless currency, fewer states are willing to dedicate resources to pursue people getting their BTC defrauded out from under them.
- toephu2 6y ago
  > The FBI has some very effective ways to pick faces out of the crowd once there's real money on the line. Like what? Any proof? How many crimes out of 100 do you think are actually caught and prosecuted by the FBI?
  - shadowgovt 6y ago
    The FBI's history is a lot to go into in the space of a Hacker News comment thread, but to summarize the thought: yes, the long tail of crimes go unsolved, but high-profile crimes or crimes embarrassing to the state tend to get resolved because the organization has many resources to devote to such a task (especially in the digital era). For example, this was embarrassing to the government because it hit national news, and the cost of the tools put on the task of finding the woman are disproportionate to the damage to the car. https://www.nbcphiladelphia.com/news/national-international/instagram-etsy-sale-tattoo-how-fbi-found-woman-accused-of-torching-ppd-cars/2436832/ https://www.nbcphiladelphia.com/news/national-international/... In this case, someone trying a major stock market manipulation would have drawn a lot of org resources. And given that even without those resources, it appears the dragnet may be closing in on them (https://krebsonsecurity.com/2020/07/whos-behind-wednesdays-epic-twitter-hack/ https://krebsonsecurity.com/2020/07/whos-behind-wednesdays-e...), it would have likely been a bad call to try actual stock manipulation with their hack.
dickjocke 6y ago
You think the FBI and SEC couldn't get a warrant, look through 10000 people's trading activity and have a list of 100 most likely suspects within a single day?
- TomMarius 6y ago
  That's severely miscalculating the number of traders (around 10 million individuals, often with multiple accounts and multiple strategies, and not counting institutions). What I'm saying is that hiding in plain sight might be very easy - just join the crowd for a week and you'll look like many beginners that have scored surprisingly.
  - ceejayoz 6y ago
    You'd only have to look at the traders with enormous short positions on specific stocks, though. It's likely you could continue to narrow things down via KYC data; location, past trading history, etc.
    - TomMarius 6y ago
      Even very average positions could yield millions, especially a series of them. Imagine a "manager" of a MLM doing this with their team of sheeps. There are many teams like that.
    - stocknoob 6y ago
      Do you trade? There are many ways to bet against a stock without actually selling it short. Shorting a stock is not even that capital efficient, and is capped at 100% return. Sell a call spread, buy a put spread, do a diagonal calendar...
      - ceejayoz 6y ago
        > Do you trade? The more relevant question is "does the SEC employ people aware of the various techniques available", to which the answer is "of course".
vmception 6y ago
Indeed it is very divorced from reality. It just requires having capital already and trading the indices.
Miner49er 6y ago
You still need capital. This could have been executed by some bored teenager who had nothing better to do on summer break (and likely has no access to capital or loans). Time is also a factor here. It's possible the hackers here were afraid their insider would chicken out. If they were afraid of that, they don't have time to setup a realistic looking brokerage account, transfer money and do some trading to make it all look good. That type of setup would take weeks or even months. If you sign up and the first thing you do is go all in on TSLA puts shortly before this happened you're gonna be on a list of suspects.
- paulgb 6y ago
  Also, didn't most of these tweets happen after the US markets close or just before? If the market had overnight to digest what had happened before trading opened the next day, the markets wouldn't move on information that had already been determined to be false. (This is assuming that the hackers did not have control of the time window in which they had elevated access.)
rytill 6y ago
I got the impression that the author doesn't quite know the volume of people holding ~100k in TSLA options that could easily be 5x that with a well-crafted tweet. Given that he said "buy the stock" and "short the stock", options leverage may be the missing puzzle piece for the author.
- PragmaticPulp 6y ago
  > I got the impression that the author doesn't quite know the volume of people holding ~100k in TSLA options that could easily be 5x that with a well-crafted tweet. When communications are hacked, the market typical figures it out in a matter of minutes. Anyone wishing to capitalize on a Twitter hack would have to have perfect timing to exit their trade. If someone was trading options of a similar volume all day every day before and after the hack, they might be able to blend in. However, once you filter down on the number of people who caught windfalls in the narrow window of time between the hack and when the market reversed and then filter further for people who invested atypically large amounts on that particular trade, it's not as short of a list as you suggest.
  - sulam 6y ago
    s/short of a list/long of a list/
  - sterlind 6y ago
    Could you set up a standing sell order at some price break, though? You'd have plausible deniability if you'd had it for a while and it just happens to get automatically exercised during a market panic.
- modeless 6y ago
  But timing is essential when taking advantage of an event like this. Lots of people are trading TSLA but few are taking positions immediately before and getting out immediately after this event, as would be required to make a consistent profit from it. And unless you have an extensive history of similar risky trades (which would probably cost a lot of money to produce by itself) your data is going to stand out like a sore thumb given that timing, even among the sea of TSLA traders.
yar77 6y ago
That’s the value of the internet that’s gone under leveraged by the public Synchronize intent in one online bubble. Make it look like banal, random, distributed behavior via Robinhood transactions. Mom, dad, grandma, and grandpa sat on the couch shouting impotently at Dan Rather. The kids are shouting about all that behind their backs and figuring out how to leverage information technology from age 5 at a different scale than 30 years ago, to coordinate
- Avicebron 6y ago
  I wonder if this falls under the category of insider trading? On one hand it's an interesting idea, convince a huge discord server to all buy a little stock. See if it moves the needle. But I can't imagine that there wouldn't be some implications from the SEC or feds if they found out the people were organizing.
  - ta17711771 6y ago
    This is what whales have been doing on the internet for decades with penny stocks etc.
  - kristjansson 6y ago
    That's... that's just a pump-and-dump scheme with a discord server.
mumblemumble 6y ago
You're making a couple implicit assumptions, here, though, such as: 1. The attacker has enough capital to load up on HTZ calls or TSLA puts. 2. The attacker has been planning this for a while. 3. The attacker is a US citizen If any of those is not true, it changes the risk/reward considerably. The money one is easy. Even if you get a bunch of call options for free, and if you manage to temporarily push TSLA down 10% (unlikely), then you still need $900,000 in working capital in order to exercise enough of those options to be able to dump them later for a $100,000 gain. #2 and #3 adjust the actual risk of the operation. #2 because shoving the money around quickly gives a clearer signal for the SEC to pick up on, and #3 because triggering a whole bunch of extra KYC red tape risks getting even more hounds on your trail. BTC does have to be turned into fiat. But I can only assume, based on how rarely people who conduct ransomware scams and the like seem to get caught, that bitcoin laundering is a solved problem.
- throwaway0a5e 6y ago
  >BTC does have to be turned into fiat. But I can only assume, based on how rarely people who conduct ransomware scams and the like seem to get caught, that bitcoin laundering is a solved problem. Furthermore, professional black hats tend to have business expenses that can be paid in bitcoin so they don't even need to convert all of it.
  - xsmasher 6y ago
    You can't just pay your amazon bill with it; that creates a paper trail. The feds could subpoena Amazon to find you. You can only pay other dark web denizens, and only if you trust them not to use it for something subpoena-able.
- lowdest 6y ago
  >then you still need $900,000 in working capital Not true, you can sell to close back into the market without exercising. This is what most options traders do. Also you can easily get them for "free" in a manner of speaking, if you use something like a bull put spread. You sell a naked leg of the position that pays for the purchase of the other leg.
chadash 6y ago
> "In reality you'd be one of thousands of people holding HTZ calls or TSLA puts in your Robinhood account." Yes, but of those people, a lot of them probably have a history of buying TSLA puts because they are generally bearish on the stock. Or a history of buying calls on HTZ. And they've lost a lot of money in the past over this, because TSLA keeps going up and HTZ keeps going down. In other words, I can look at all buyers of HTZ and TSLA stocks and most likely eliminate those with histories of buying puts or calls on these stocks. So now I have a smaller pool of people who suddenly bought HTZ or TSLA puts/calls. Of those, I can probably eliminate anyone with small positions. This isn't worth risking for a profit of a few thousand dollars. Sure I can get a few friends together to invest from their accounts, but the more people i involve, the more i risk. Plus, i can't just do family members or friends who live nearby (unless i'm in a major city), because it'll look strange if a group of people who are related or live close to each other are running the same trades at the same time. So now they have whittled it down quite a bit. So i bring in the FBI and I start investigating my much smaller list and I target it towards people with computer savviness. It's can probably eliminate accountants and many others who most likely don't have skills to hack twitter. So it's a smaller group of people and the chances of getting caught are no longer so small (not to say it's impossible to get away with it though).
- awinder 6y ago
  I’m not honestly 100% sure of the situation right now, but things like hertz catch on with more first-time-sucker money than you might think. I mean your benchmark is people with tsla shenanigans, which is relatively recent. With larger betting sports out or curtailed I’m just not sure there isn’t a big enough sea to hide out in.
  - PragmaticPulp 6y ago
    The window of opportunity for a hack like this is extraordinarily small. The market would have caught on to the hack and reverted back to normal pricing within minutes. Anyone capitalizing on it would have had to be waiting with their finger on the trade button. It's not comparable to something like the Hertz thing which drags on for weeks or the TSLA run-up which has been going on for months. Imagine filtering for trades that happen within a specific 120-second window. Then filter by people who have atypically large volume during that window. It's not a long list.
JumpCrisscross 6y ago
> you'd be one of thousands of people holding HTZ calls or TSLA puts in your Robinhood account Former options market maker. We regularly got incredibly detailed data requests from regulators following corporate actions. Everyone who made money got scrutiny. Anyone who made money who wasn't similarly profitable before is almost automatically punted to their broker's compliance department, who will put in several hours of investigative work by default. One of the most consistent knowledge gaps between professional and amateur traders, I've found, is the underestimation of how advanced and pervasive insider trading / market manipulation surveillance is.
- kristjansson 6y ago
  > knowledge gaps It's something you know intellectually, but MAN it's wild to see it in action.
- aeternum 6y ago
  This might be true if you work at a professional brokerage or hedge fund, but there's no way the SEC can investigate everyone holding a few million worth of TSLA options. Someone who buys a few million in puts just before hacking twitter is indistinguishable from some random robinhood user who decides it's time to go all in on puts because of a wsb post.
  - pcwalton 6y ago
    People in this thread are seriously underestimating the competence of the authorities in dealing with financial crimes. Virtually everything people are suggesting here is something law enforcement has seen a thousand times before. Lots of people have had the idea that the SEC/FBI/etc. can never catch them. Right up until they go to prison.
    - toephu2 6y ago
      > People in this thread are seriously underestimating the competence of the authorities in dealing with financial crimes. Any stats/evidence to backup your claim?
kristjansson 6y ago
If that really happened, I think the SEC would have some questions for _every_ TSLA short / HTZ long that made exorbitant profit, with a special emphasis on anyone that entered recently.
tehjoker 6y ago
The funny part is thinking the SEC is an enforcement agency rather than a partner of the firms that offer a high paying job to former officials.
xondono 6y ago
A lot of people are missing the obvious way to avoid scrutiny, use another big twitter account to tweet what you are about to do. You might be the only trader taking investment advice from Taylor Swift, but plausible deniability is all you need
- Zenbit_UX 6y ago
  When Taylor Swift starts getting tweet responses to her "short Tesla!" tweet she would declare she was hacked very quickly and your plausible deniability would collapse.
catblast 6y ago
> In reality you'd be one of thousands of people holding HTZ calls or TSLA puts in your Robinhood account. You could make a huge payday and be indistinguishable from the crowd. This is utterly clueless.
- bugzz 6y ago
  why?
- usmannk 6y ago
  I take it you haven't spent much time on wallstreetbets.
  - catblast 6y ago
    For one, having known many posters on wsb personally, the number of people actually trading large positions vs the number participating in that forum is not the same. Finally, people (apparently even the "informed" crowd here) greatly overestimate the difficulty of identifying individuals or actions in massive systems that are effectively recorded and completely surveilled, and they underestimate the resources of the feds. It's usually not that hard to whittle down to a handful of actions, and even if there are hundreds it only takes a tiny bit of taxpayer money to comb through it by hand.
nthj 6y ago
If you want to blend in with the RobinHood traders then you need to have some capital at play already and have had some success. Anyone whose first significant successful trades were yesterday would be up for scrutiny. At the point you fit that profile, risking what you have (and your freedom) for more becomes much less appealing. Also, I suspect that if the hack had occurred during market hours, Twitter execs would have aggressively shut down the entire site. I imagine the hacks were intentionally timed to start after the markets closed to maximize the window for bitcoin payments. Twitter stayed up, so if that was the strategy, it seemed to work.
panarky 6y ago
> one person will eventually have to turn this BTC into fiat Not if the perpetrator already participates in a cryptocurrency economy. And even if the individual wants to convert to government currency, do you think that's a big hurdle in post Soviet states, or for state-sponsored attackers?
vikramkr 6y ago
Blue sheets are no joke. I got to see a glimpse of the info the SEC collects and learn a bit about how they use it. Dont underestimate the SEC on market manipulation. You would not be indistinguishable- it's a trap "novice" market manipulators fall for that makes them so easy to catch before they do really big news-worthy trades.
ZachPruckowski 6y ago
I'm not sure this works. A lot of the folks who're short on Tesla are big names with trading records who've been short on Tesla for a while. If you roll up and your first stock trade is to buy some short term put options right before the hack and then cash out immediately[1], that's going to be distinguishable and suspicious. Any efforts to defer that (using a patsy with an established trading history, buying longer-term options, buying them earlier) cuts into your margins, and may well not work (since again, you've got to be the first one out since you know it's a momentary dip). [1] - Remember, you know this is a momentary dip because you know the hack is going to get discovered soon, but the other investors don't know where the bottom is.
mekster 6y ago
But you're divorced from reality too. Feds would first filter the list of traders who have clean backgrounds and narrow it down to anyone who haven't been trading the stock for a while and they will review anyone who have withdrawn their cash quickly. Unless you have been doing years of planning, planting clean evidences, you would stand out from the crowd.
piracy1 6y ago
Fraudsters open bank accounts in other peoples names all the time. The FBI says, if you wire money out the country, it's gone after 72 hours. I think they could do it with some effort and coordination. The main issue is that it was just a lone person not organized crime, not someone with tens of millions to spend, not someone with friends who own a hedge fund.

jamiequint 6y ago

Anonymizing BTC is a lot easier than hiding from the SEC. There are that many people holding massive amounts of short-term TSLA options (enough to make >$500k on a single day movement) that the SEC can't look at each of them.

Sebb767 6y ago
I highly doubt that the SEC wouldn't put the required resources into this. After all, this would've caused tens of millions in damages, rather than the mediocre 100k$. Also, you could filter for new traders and traders overly invested in TSLA. Giving the rather mediocre execution (i.e. single Bitcoin address), I doubt the attacker had a lot of time and capital upfront to hide in these masses. Lastly, stock market transactions can be paused and are reversible - there's a good chance of a circuit breaker hitting or a reversal happening with that blatant market manipulation.
- JumpCrisscross 6y ago
  > the SEC wouldn't put the required resources into this Keep in mind that a lot of the SEC's enforcement breadth comes from brokers' compliance departments. Any time anyone makes an unusual profit around corporate actions, the SEC basically requires a thorough investigation by the broker's compliance staff.
  - Sebb767 6y ago
    That's exactly what I said :) > I highly doubt that the SEC wouldn't put the required resources into this I doubt they would not -> I think they would
- michaelt 6y ago
  When Musk posted a tweet 'joking' about taking Tesla private, which was utterly trivial to investigate, the SEC only managed to deliver a slap on the wrist. Not sure I agree they'd have investigated thousands of people.
  - AndrewBissell 6y ago
    Musk is in one class of people, people who for the most part are completely beyond consequences for things like financial crimes, fraud, or even causing mass death (as in the case of the Sacklers and the opioid crisis). You and I and yesterday's Twitter hacker are not in this class.
  - ZachPruckowski 6y ago
    >When Musk posted a tweet 'joking' about taking Tesla private, which was utterly trivial to investigate, the SEC only managed to deliver a slap on the wrist. Because prosecuting Elon Musk requires going up against top tier defense lawyers and proving things like "Musk tweeted this with the intention of impacting his stock's value" or something. With hackers, you can use the financial stuff to target the hackers, and then either (a) prove the computer crimes or (b) use the computer crimes and the surrounding stock sales to prove intent. You also don't have to go up against a legal defense better funded than some militaries.
- kbenson 6y ago
  Also, getting away with an event like that hurts confidence in the stock market as a whole. It's not not purely about immediate damages to people in the market, it's also about how willing people are to participate in the future. A fraction of a percent of less people participating or slowing activity likely amount to many multiples of the damages from this event. The SEC would be extremely motivated to find these people to make an example of them so others think twice in the future.
ysris 6y ago
The SEC can look at each of them. Compliance and suspicious trading activity mechanisms put in place by financial actors are very sophisticate. Analyze millions of trades and make reports out of it is not a big deal. I wouldn't be surprised if SEC is already analyzing trades related to stocks impacted by this hack.
- toephu2 6y ago
  You think the government is that efficient (or cares)?
  - user5994461 6y ago
    Yes. The hacked accounts include the likes of Trump, Obama, Elon Musk, Bill Gates. Bet they will push to track down who did it.

eschulz 6y ago

Why not both?

tobylane 6y ago

You probably have to give Robinhood information about yourself for anti money laundering legislation. I don’t use them, but I had to give my birthplace and National Insurance (UK’s SSN) because of the latest round of aml law.

shadowgovt 6y ago

The FBI has some very effective ways to pick faces out of the crowd once there's real money on the line. One of the advantages of using BTC for this attack is that as a stateless currency, fewer states are willing to dedicate resources to pursue people getting their BTC defrauded out from under them.

toephu2 6y ago
> The FBI has some very effective ways to pick faces out of the crowd once there's real money on the line. Like what? Any proof? How many crimes out of 100 do you think are actually caught and prosecuted by the FBI?
- shadowgovt 6y ago
  The FBI's history is a lot to go into in the space of a Hacker News comment thread, but to summarize the thought: yes, the long tail of crimes go unsolved, but high-profile crimes or crimes embarrassing to the state tend to get resolved because the organization has many resources to devote to such a task (especially in the digital era). For example, this was embarrassing to the government because it hit national news, and the cost of the tools put on the task of finding the woman are disproportionate to the damage to the car. https://www.nbcphiladelphia.com/news/national-international/instagram-etsy-sale-tattoo-how-fbi-found-woman-accused-of-torching-ppd-cars/2436832/ https://www.nbcphiladelphia.com/news/national-international/... In this case, someone trying a major stock market manipulation would have drawn a lot of org resources. And given that even without those resources, it appears the dragnet may be closing in on them (https://krebsonsecurity.com/2020/07/whos-behind-wednesdays-epic-twitter-hack/ https://krebsonsecurity.com/2020/07/whos-behind-wednesdays-e...), it would have likely been a bad call to try actual stock manipulation with their hack.

dickjocke 6y ago

You think the FBI and SEC couldn't get a warrant, look through 10000 people's trading activity and have a list of 100 most likely suspects within a single day?

TomMarius 6y ago
That's severely miscalculating the number of traders (around 10 million individuals, often with multiple accounts and multiple strategies, and not counting institutions). What I'm saying is that hiding in plain sight might be very easy - just join the crowd for a week and you'll look like many beginners that have scored surprisingly.
- ceejayoz 6y ago
  You'd only have to look at the traders with enormous short positions on specific stocks, though. It's likely you could continue to narrow things down via KYC data; location, past trading history, etc.
  - TomMarius 6y ago
    Even very average positions could yield millions, especially a series of them. Imagine a "manager" of a MLM doing this with their team of sheeps. There are many teams like that.
  - stocknoob 6y ago
    Do you trade? There are many ways to bet against a stock without actually selling it short. Shorting a stock is not even that capital efficient, and is capped at 100% return. Sell a call spread, buy a put spread, do a diagonal calendar...
    - ceejayoz 6y ago
      > Do you trade? The more relevant question is "does the SEC employ people aware of the various techniques available", to which the answer is "of course".

vmception 6y ago

Indeed it is very divorced from reality. It just requires having capital already and trading the indices.

Miner49er 6y ago

You still need capital. This could have been executed by some bored teenager who had nothing better to do on summer break (and likely has no access to capital or loans). Time is also a factor here. It's possible the hackers here were afraid their insider would chicken out. If they were afraid of that, they don't have time to setup a realistic looking brokerage account, transfer money and do some trading to make it all look good. That type of setup would take weeks or even months. If you sign up and the first thing you do is go all in on TSLA puts shortly before this happened you're gonna be on a list of suspects.

paulgb 6y ago
Also, didn't most of these tweets happen after the US markets close or just before? If the market had overnight to digest what had happened before trading opened the next day, the markets wouldn't move on information that had already been determined to be false. (This is assuming that the hackers did not have control of the time window in which they had elevated access.)

rytill 6y ago

I got the impression that the author doesn't quite know the volume of people holding ~100k in TSLA options that could easily be 5x that with a well-crafted tweet. Given that he said "buy the stock" and "short the stock", options leverage may be the missing puzzle piece for the author.

PragmaticPulp 6y ago
> I got the impression that the author doesn't quite know the volume of people holding ~100k in TSLA options that could easily be 5x that with a well-crafted tweet. When communications are hacked, the market typical figures it out in a matter of minutes. Anyone wishing to capitalize on a Twitter hack would have to have perfect timing to exit their trade. If someone was trading options of a similar volume all day every day before and after the hack, they might be able to blend in. However, once you filter down on the number of people who caught windfalls in the narrow window of time between the hack and when the market reversed and then filter further for people who invested atypically large amounts on that particular trade, it's not as short of a list as you suggest.
- sulam 6y ago
  s/short of a list/long of a list/
- sterlind 6y ago
  Could you set up a standing sell order at some price break, though? You'd have plausible deniability if you'd had it for a while and it just happens to get automatically exercised during a market panic.
modeless 6y ago
But timing is essential when taking advantage of an event like this. Lots of people are trading TSLA but few are taking positions immediately before and getting out immediately after this event, as would be required to make a consistent profit from it. And unless you have an extensive history of similar risky trades (which would probably cost a lot of money to produce by itself) your data is going to stand out like a sore thumb given that timing, even among the sea of TSLA traders.

yar77 6y ago

That’s the value of the internet that’s gone under leveraged by the public Synchronize intent in one online bubble. Make it look like banal, random, distributed behavior via Robinhood transactions. Mom, dad, grandma, and grandpa sat on the couch shouting impotently at Dan Rather. The kids are shouting about all that behind their backs and figuring out how to leverage information technology from age 5 at a different scale than 30 years ago, to coordinate

Avicebron 6y ago
I wonder if this falls under the category of insider trading? On one hand it's an interesting idea, convince a huge discord server to all buy a little stock. See if it moves the needle. But I can't imagine that there wouldn't be some implications from the SEC or feds if they found out the people were organizing.
- ta17711771 6y ago
  This is what whales have been doing on the internet for decades with penny stocks etc.
- kristjansson 6y ago
  That's... that's just a pump-and-dump scheme with a discord server.

mumblemumble 6y ago

You're making a couple implicit assumptions, here, though, such as: 1. The attacker has enough capital to load up on HTZ calls or TSLA puts. 2. The attacker has been planning this for a while. 3. The attacker is a US citizen If any of those is not true, it changes the risk/reward considerably. The money one is easy. Even if you get a bunch of call options for free, and if you manage to temporarily push TSLA down 10% (unlikely), then you still need $900,000 in working capital in order to exercise enough of those options to be able to dump them later for a $100,000 gain. #2 and #3 adjust the actual risk of the operation. #2 because shoving the money around quickly gives a clearer signal for the SEC to pick up on, and #3 because triggering a whole bunch of extra KYC red tape risks getting even more hounds on your trail. BTC does have to be turned into fiat. But I can only assume, based on how rarely people who conduct ransomware scams and the like seem to get caught, that bitcoin laundering is a solved problem.

throwaway0a5e 6y ago
>BTC does have to be turned into fiat. But I can only assume, based on how rarely people who conduct ransomware scams and the like seem to get caught, that bitcoin laundering is a solved problem. Furthermore, professional black hats tend to have business expenses that can be paid in bitcoin so they don't even need to convert all of it.
- xsmasher 6y ago
  You can't just pay your amazon bill with it; that creates a paper trail. The feds could subpoena Amazon to find you. You can only pay other dark web denizens, and only if you trust them not to use it for something subpoena-able.
lowdest 6y ago
>then you still need $900,000 in working capital Not true, you can sell to close back into the market without exercising. This is what most options traders do. Also you can easily get them for "free" in a manner of speaking, if you use something like a bull put spread. You sell a naked leg of the position that pays for the purchase of the other leg.

chadash 6y ago

> "In reality you'd be one of thousands of people holding HTZ calls or TSLA puts in your Robinhood account." Yes, but of those people, a lot of them probably have a history of buying TSLA puts because they are generally bearish on the stock. Or a history of buying calls on HTZ. And they've lost a lot of money in the past over this, because TSLA keeps going up and HTZ keeps going down. In other words, I can look at all buyers of HTZ and TSLA stocks and most likely eliminate those with histories of buying puts or calls on these stocks. So now I have a smaller pool of people who suddenly bought HTZ or TSLA puts/calls. Of those, I can probably eliminate anyone with small positions. This isn't worth risking for a profit of a few thousand dollars. Sure I can get a few friends together to invest from their accounts, but the more people i involve, the more i risk. Plus, i can't just do family members or friends who live nearby (unless i'm in a major city), because it'll look strange if a group of people who are related or live close to each other are running the same trades at the same time. So now they have whittled it down quite a bit. So i bring in the FBI and I start investigating my much smaller list and I target it towards people with computer savviness. It's can probably eliminate accountants and many others who most likely don't have skills to hack twitter. So it's a smaller group of people and the chances of getting caught are no longer so small (not to say it's impossible to get away with it though).

awinder 6y ago
I’m not honestly 100% sure of the situation right now, but things like hertz catch on with more first-time-sucker money than you might think. I mean your benchmark is people with tsla shenanigans, which is relatively recent. With larger betting sports out or curtailed I’m just not sure there isn’t a big enough sea to hide out in.
- PragmaticPulp 6y ago
  The window of opportunity for a hack like this is extraordinarily small. The market would have caught on to the hack and reverted back to normal pricing within minutes. Anyone capitalizing on it would have had to be waiting with their finger on the trade button. It's not comparable to something like the Hertz thing which drags on for weeks or the TSLA run-up which has been going on for months. Imagine filtering for trades that happen within a specific 120-second window. Then filter by people who have atypically large volume during that window. It's not a long list.

JumpCrisscross 6y ago

> you'd be one of thousands of people holding HTZ calls or TSLA puts in your Robinhood account Former options market maker. We regularly got incredibly detailed data requests from regulators following corporate actions. Everyone who made money got scrutiny. Anyone who made money who wasn't similarly profitable before is almost automatically punted to their broker's compliance department, who will put in several hours of investigative work by default. One of the most consistent knowledge gaps between professional and amateur traders, I've found, is the underestimation of how advanced and pervasive insider trading / market manipulation surveillance is.

kristjansson 6y ago
> knowledge gaps It's something you know intellectually, but MAN it's wild to see it in action.
aeternum 6y ago
This might be true if you work at a professional brokerage or hedge fund, but there's no way the SEC can investigate everyone holding a few million worth of TSLA options. Someone who buys a few million in puts just before hacking twitter is indistinguishable from some random robinhood user who decides it's time to go all in on puts because of a wsb post.
- pcwalton 6y ago
  People in this thread are seriously underestimating the competence of the authorities in dealing with financial crimes. Virtually everything people are suggesting here is something law enforcement has seen a thousand times before. Lots of people have had the idea that the SEC/FBI/etc. can never catch them. Right up until they go to prison.
  - toephu2 6y ago
    > People in this thread are seriously underestimating the competence of the authorities in dealing with financial crimes. Any stats/evidence to backup your claim?

kristjansson 6y ago

If that really happened, I think the SEC would have some questions for _every_ TSLA short / HTZ long that made exorbitant profit, with a special emphasis on anyone that entered recently.

tehjoker 6y ago

The funny part is thinking the SEC is an enforcement agency rather than a partner of the firms that offer a high paying job to former officials.

xondono 6y ago

A lot of people are missing the obvious way to avoid scrutiny, use another big twitter account to tweet what you are about to do. You might be the only trader taking investment advice from Taylor Swift, but plausible deniability is all you need

Zenbit_UX 6y ago
When Taylor Swift starts getting tweet responses to her "short Tesla!" tweet she would declare she was hacked very quickly and your plausible deniability would collapse.

catblast 6y ago

> In reality you'd be one of thousands of people holding HTZ calls or TSLA puts in your Robinhood account. You could make a huge payday and be indistinguishable from the crowd. This is utterly clueless.

bugzz 6y ago
why?
usmannk 6y ago
I take it you haven't spent much time on wallstreetbets.
- catblast 6y ago
  For one, having known many posters on wsb personally, the number of people actually trading large positions vs the number participating in that forum is not the same. Finally, people (apparently even the "informed" crowd here) greatly overestimate the difficulty of identifying individuals or actions in massive systems that are effectively recorded and completely surveilled, and they underestimate the resources of the feds. It's usually not that hard to whittle down to a handful of actions, and even if there are hundreds it only takes a tiny bit of taxpayer money to comb through it by hand.

nthj 6y ago

If you want to blend in with the RobinHood traders then you need to have some capital at play already and have had some success. Anyone whose first significant successful trades were yesterday would be up for scrutiny. At the point you fit that profile, risking what you have (and your freedom) for more becomes much less appealing. Also, I suspect that if the hack had occurred during market hours, Twitter execs would have aggressively shut down the entire site. I imagine the hacks were intentionally timed to start after the markets closed to maximize the window for bitcoin payments. Twitter stayed up, so if that was the strategy, it seemed to work.

panarky 6y ago

> one person will eventually have to turn this BTC into fiat Not if the perpetrator already participates in a cryptocurrency economy. And even if the individual wants to convert to government currency, do you think that's a big hurdle in post Soviet states, or for state-sponsored attackers?

vikramkr 6y ago

Blue sheets are no joke. I got to see a glimpse of the info the SEC collects and learn a bit about how they use it. Dont underestimate the SEC on market manipulation. You would not be indistinguishable- it's a trap "novice" market manipulators fall for that makes them so easy to catch before they do really big news-worthy trades.

ZachPruckowski 6y ago

I'm not sure this works. A lot of the folks who're short on Tesla are big names with trading records who've been short on Tesla for a while. If you roll up and your first stock trade is to buy some short term put options right before the hack and then cash out immediately[1], that's going to be distinguishable and suspicious. Any efforts to defer that (using a patsy with an established trading history, buying longer-term options, buying them earlier) cuts into your margins, and may well not work (since again, you've got to be the first one out since you know it's a momentary dip). [1] - Remember, you know this is a momentary dip because you know the hack is going to get discovered soon, but the other investors don't know where the bottom is.

mekster 6y ago

But you're divorced from reality too. Feds would first filter the list of traders who have clean backgrounds and narrow it down to anyone who haven't been trading the stock for a while and they will review anyone who have withdrawn their cash quickly. Unless you have been doing years of planning, planting clean evidences, you would stand out from the crowd.

piracy1 6y ago

Fraudsters open bank accounts in other peoples names all the time. The FBI says, if you wire money out the country, it's gone after 72 hours. I think they could do it with some effort and coordination. The main issue is that it was just a lone person not organized crime, not someone with tens of millions to spend, not someone with friends who own a hedge fund.