(Bloomberg) — Major cryptocurrencies gave back their advances after Walmart Inc. denied having an agreement to use Litecoin for purchases.
Litecoin — which rose as much as 33% at one point — erased nearly all its gains. Bitcoin, the largest digital asset, was down 2% as of 11:25 a.m. in New York after earlier having advanced roughly 4%. Other digital assets also retreated, with Bitcoin Cash, Ether and EOS all declining.
The statement that was released via Globe Newswire isn’t authentic, a Walmart representative confirmed to Bloomberg News. The company is in the process of trying to learn more about the release.
Alan Austin of the Litecoin Foundation said he couldn’t comment immediately when reached via phone by Bloomberg News. Litecoin officials couldn’t immediately be reached for comment.
Meanwhile, a verified Litecoin Twitter account deleted a tweet that linked to a press release announcing the partnership.
The news, which was quickly debunked, had spread like wildfire on Twitter, where a lot of crypto discourse occurs. Crypto backers — though they questioned why Walmart might partner with a lesser-known and lesser-used coin than Bitcoin, for instance — were thrilled to see another big name getting behind the movement.
“This went from being extremely good news for crypto that strengthened the ‘polychain’ thesis to a black eye on the space in a matter of minutes,” said Stephane Ouellette, chief executive and co-founder of FRNT Financial. “Threats of market manipulation have been one of the primary focuses of regulators around these assets and to say this will get their attention is an extreme understatement.”
Scams in crypto are not new. In the summer of 2020, the Twitter accounts of some of the most prominent U.S. political and business leaders had been hacked in an apparent effort to promote a Bitcoin scam. Barack Obama and Joe Biden to Jeff Bezos and Warren Buffett had all been targeted as part of that attack.
The efforts behind the Litecoin hoax included the creation of an email address based on a sham domain name, as well as a fake news release that included quotes attributed to Walmart executives. The release had been submitted to a known public relations wire service and was picked up by major news outlets including CNBC, Reuters and Bloomberg News.
While hoaxes that move asset prices crop up in financial markets all the time, cryptocurrencies would seem to provide particularly fertile ground for deceivers. Unlike stocks, trading is mostly untraceable — scammers leave few tracks for regulators to follow. And it doesn’t take much to move the assets. Traders are conditioned to expect hysterical price reactions on flimsy news — when, say, Elon Musk tweets his approval of a crypto project.
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