When Bitcoin Hit $110K on a Lie: Paraguay’s Fake Legal Tender Tweet Explained

Key Takeaways

• President Santiago Peña’s X account was compromised, spreading a fake declaration that Paraguay had made Bitcoin legal tender and launched a $5M BTC reserve.
• The false news triggered a rapid 4% surge in BTC’s price to $110,530 before retreating after government clarification.
• The wallet address promoted in the tweet held only $4 and had no transaction history, classic signs of a phishing scam.
• The country’s status as a low-cost mining hub made the fake tweet believable, despite Paraguay not having any legal framework supporting Bitcoin as tender.

In June 2025, the cryptocurrency world was rocked by a false announcement that sent Bitcoin’s price soaring past $110,000. The source? A hacked social media account belonging to Paraguayan President Santiago Peña, falsely claiming that Paraguay had adopted Bitcoin as legal tender. 

This incident serves as a cautionary tale about the volatility of cryptocurrency markets, the dangers of misinformation, and the importance of verifying information in the digital age. 

This article breaks down what happened, how it affected Bitcoin’s price, and the lessons investors and enthusiasts can learn from this event.

What Happened in the Paraguay Tweet Scandal?

On June 9, 2025, a post appeared on President Santiago Peña’s official X account, claiming that Paraguay had made Bitcoin legal tender, established a $5 million Bitcoin reserve, and was issuing crypto-backed bonds for “crypto-enabled citizens.” 

The post, written in English rather than the president’s usual Spanish, included a Bitcoin wallet address, urging investors to send funds to “secure their stake.” 

This announcement sparked excitement in the cryptocurrency community, as it suggested that Paraguay might follow in the footsteps of El Salvador, the first country to adopt Bitcoin as legal tender in 2021.

However, the Paraguayan government quickly intervened, issuing a statement from its official X account that the president’s account had been compromised. The post was deleted, and the government clarified that no such policy existed. 

Paraguay’s national cybersecurity team, CERTpy, began investigating the breach in collaboration with X’s security team. On-chain analysis later revealed that the Bitcoin wallet address shared in the post held only $4 and had no transaction history, a clear red flag that the announcement was part of a phishing scam.

How the Fake Tweet Impacted Bitcoin’s Price

The false announcement had an immediate effect on Bitcoin’s price. On June 10, 2025, Bitcoin surged by 4%, climbing above $110,000 and reaching a high of $110,530.

The rapid price increase was driven by market excitement over the prospect of another nation adopting Bitcoin as legal tender, a move that historically boosts investor confidence. 

However, once the Paraguayan government debunked the claim, Bitcoin’s price retreated to around $109,000, highlighting the market’s sensitivity to unverified news.

This event underscores the volatility of cryptocurrency markets, where prices can swing dramatically based on rumors or misinformation. The temporary spike also coincided with positive developments in U.S.-China trade negotiations, which likely amplified the market’s reaction.

For investors, this serves as a reminder of how quickly unverified news can influence prices and the importance of staying grounded in verified information.

Why Paraguay? Understanding the Context

Paraguay has emerged as a hub for Bitcoin mining due to its abundant hydroelectric power, which offers low-cost energy for energy-intensive mining operations. Companies like HIVE have established significant operations in the country. 

However, unlike El Salvador, Paraguay has not adopted Bitcoin as legal tender or established a comprehensive regulatory framework for cryptocurrencies. 

President Peña, a trained economist and former IMF advisor, has focused on fiscal reform and digital infrastructure rather than crypto adoption. The hacked tweet’s claims were inconsistent with Paraguay’s cautious approach to cryptocurrency regulation, making it a prime target for scammers looking to exploit the country’s crypto-friendly reputation.

Is Crypto Regulated in Paraguay?

As of June 2025, Paraguay has not legalized or officially recognized cryptocurrencies as a means of payment. The Central Bank of Paraguay and the Superintendencia de Valores (the country’s financial regulator) continue to state that crypto-assets are not authorized or registered for use within the national financial system. 

Despite Paraguay being a hub for Bitcoin mining due to its abundant hydroelectric energy, there is no legal framework fully regulating the crypto space yet.

Meanwhile, Paraguay is working toward greater oversight. A crypto-asset bill introduced in 2022 remains under review. If passed, it would require crypto service providers, like exchanges and miners, to register with the Ministry of Industry and Commerce and comply with anti-money laundering (AML) rules. 

Paraguay’s financial crime authority (SEPRELAD) is also collaborating with El Salvador’s digital assets regulator to strengthen AML monitoring through shared practices.

Lessons from the Paraguay Tweet Scandal

The Paraguay Tweet Scandal offers several key lessons for cryptocurrency investors, enthusiasts, and the general public:

1. Verify Information Before Acting

The crypto market is highly reactive to news, especially from authoritative sources like a president’s social media account. However, this incident highlights the importance of verifying information through official channels. Investors should cross-check announcements with trusted sources, such as government websites or reputable news outlets, before making financial decisions.

2. Beware of Phishing Scams

The inclusion of a Bitcoin wallet address in the fake tweet is a classic tactic used in crypto scams. Hackers often exploit high-profile accounts to trick users into sending funds to fraudulent addresses. Always be cautious of unsolicited requests to send cryptocurrency, and double-check the legitimacy of any wallet address.

3. Understand Market Volatility

The rapid rise and fall of Bitcoin’s price during this event demonstrate the cryptocurrency market’s volatility. While exciting, these fluctuations can lead to significant losses for unprepared investors. Understanding the factors that drive price movements, such as news and market sentiment, is crucial for navigating the crypto space.

4. Strengthen Cybersecurity Awareness

The hack of President Peña’s X account is part of a broader trend of cyberattacks targeting high-profile figures and institutions. In 2025 alone, Paraguay reported 18 breaches of public agencies, including the civil aviation regulator and justice ministry. This underscores the need for robust cybersecurity measures, both for individuals and organizations, to protect against unauthorized access and misinformation.

5. Learn from Historical Precedents

The Paraguay Tweet Scandal is not an isolated incident. In 2020, the X accounts of prominent figures like Elon Musk, Bill Gates and Joe Biden were hacked to promote Bitcoin scams, with hackers stealing over $100,000 from unsuspecting users. These incidents highlight the ongoing risks of social media hacks in the crypto space.

Bigger Picture? Misinformation in the Crypto World

The Paraguay Tweet Scandal is a stark reminder of the power of misinformation in the cryptocurrency industry. False announcements from credible sources can create waves in the market, leading to price spikes and potential losses for investors who act on unverified information.

This event also highlights the growing sophistication of crypto scams, which often exploit the trust associated with official accounts to deceive users.

For the crypto community, staying informed and skeptical is essential. Tools like on-chain analysis, which revealed the scam wallet’s lack of activity, can help investors identify red flags. Additionally, following reputable news sources and engaging with verified community members on platforms like X can provide valuable insights and updates.

Argentina’s Cryptogate: Milei, $LIBRA, and the $250M Memecoin Collapse

In February 2025, Argentine President Javier Milei endorsed a new memecoin called $LIBRA, quickly promoting it across X, Facebook, and Instagram. Within 40 minutes of his post, the token’s value skyrocketed from near-zero to over $5, creating a $4–4.5 billion market cap, before crashing by nearly 85%. Founders and insiders reportedly pocketed around $87 million, while over 74,000 investors suffered losses totaling approximately $250 million.

Dubbed “Cryptogate”, the affair sparked criminal complaints, congressional inquiries, and a probe by Argentina’s anti-corruption office. Milei claimed he merely “shared” the token without vetting it and promptly deleted the post. Critics accuse him of fueling a classic rug-pull from the highest office.

On June 5, Argentina’s Anti-Corruption Office officially cleared him of ethics violations, finding that his promotion was as a private citizen, not in his official capacity. Despite the ethics clearance, criminal inquiries continue in Argentine courts. 

Conclusion

The Paraguay Tweet Scandal of June 2025 serves as an educational moment for the cryptocurrency community. When Bitcoin hit $110,000 on the back of a hacked tweet, it demonstrated how quickly misinformation can spread and impact markets. 

By prioritizing verification, practicing cybersecurity diligence, and understanding market dynamics, investors can protect themselves from scams and make informed decisions in the fast-paced world of cryptocurrency.

As the crypto industry continues to grow, incidents like this highlight the importance of education and awareness. Whether you’re a seasoned investor or a newcomer to the space, staying vigilant and informed is the key to navigating the exciting yet unpredictable world of digital currencies.

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