This is absolutely correct—I remember quite clearly how it all went down. When Twitter first rolled out verification, it was supposed to ensure that the person you were following or interacting with was the person they claimed to be.
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This was also because there were so many people setting up fake accounts using real celebs. The most famous of which was probably the Dave Chapelle, Kat Williams story that Chapelle tells where a fake Chapelle account was feuding with a fake Kat Williams account.