News that Walmart would accept cryptocurrency Litecoin sent its value up before it came crashing down after the press release turned out to be a fake.
Litecoin saw a spectacular spike in value off the back of the news. For most of the past five days it has been hovering within a few pounds either side of £130. But the news, around midday on September 13th, caused it to leap in value from around £126 to £156.
However, within an hour it had fallen back down to £130.
The cause was a press release claiming that major US shopping chain Walmart would start taking payments in Litecoin on its digital store from October 1st.
It also contained fabricated quotes from Walmart’s chief executive Doug McMillon and the founder of Litecoin.
“The eCommerce giant intends to give its millions of shoppers across the world an opportunity to seamlessly make payments with cryptocurrencies,” the phony release claimed.
“The momentum and excitement around the use of cryptocurrency are undeniable, and we are poised to make online shopping easy for our customers,” it added, attributing the quote to McMillon.
In addition, the release contained a press contact email address. However, this pointed to a web domain that had only been registered last month, while emails sent to it bounced as undeliverable.
The news was published by legitimate press source Global Newswire, leading it to be picked up by several news sites and press agencies.
Walmart itself never made mention of any deal. Representatives from US news channel CNBC unearthed the scam when they contacted Walmart representatives who told them the news was fake.
The Litecoin Foundation, a Singapore-based non-profit headed by Litecoin’s creator Charlie Lee and dedicated to advancing Litecoin, linked to the release on its verified Twitter account when the post was published, but has since deleted the Tweet.
The fake release has since been removed.
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Litecoin, a relatively obscure cryptocurrency, was spun off from Bitcoin in 2011. Lee claimed in 2017 to have sold all his holdings in Litecoin, claiming a conflict of interest in owning and promoting it.
For their relatively short history, cryptocurrency prices have generally been volatile – it’s their greatest flaw and benefit. Announcements that companies like Tesla, Visa, and Amazon are getting involved in cryptocurrencies helped push Bitcoin prices up. Even a simple tweet from tech billionaire Elon Musk had an effect, making money for anyone holding Bitcoin.
Of course, the opposite can be true – when El Salvador made Bitcoin a legal currency, problems with the rollout quickly robbed the cryptocurrency of almost $10,000 worth of value.
As such, raising hype around a cryptocurrency is an easy way to make a quick profit – buying low and selling it high before the surge of enthusiasm wears off.
Presently, who was behind the scam, or how they did it, is unknown.