Fake press release said Walmart would be accepting the currency
Litecoin’s value jumped about 23% Monday morning on the big news that Walmart would be accepting the cryptocurrency. There was just one small problem: It wasn’t true. Whoever perpetrated the hoax created a fake press release with quotes attributed to Walmart CEO Doug McMillon and got it posted to GlobeNewswire, with several major media outlets picking up the story.
That was enough to send the price of a Litecoin to $220 after it began the day at $178. As the hoax was uncovered, with Walmart denying that it would be accepting Litecoin as a form of payment, the price tumbled back to where it began. The sudden activity prompted suspicions that the whole thing was a pump-and-dump scheme, with the perpetrators cashing out their Litecoin at the higher price before it came crashing back down. Several billion dollars of Litecoin were exchanged before the announcement was confirmed to be fake, according to Coinbase.
GlobeNewswire sent out a notice to disregard, but the damage had already been done. Walmart shares moved very little, so the country’s largest employer wasn’t much affected by the hoax. The press release contained numerous fact errors that were red flags for keen observers. It was also notable that Walmart typically uses Business Wire for its press releases.
Regulation of cryptocurrencies has been a focus of congressional legislation this time, as the anonymous nature and volatility of the digital currencies have led to concerns that they are ripe for manipulation and illegal activity. The anonymity and deregulation are, of course, what make crypto so popular for enthusiasts, who argue that payment systems outside the control of governments and central banks are more democratizing than fiat currency.
As perhaps an unintended consequence of the hoax, other cryptocurrencies also saw their values jump based on the anticipation that more would be soon to follow Litecoin as an accepted form of payment at the largest retailer in the U.S.