After rumours of a cooperation with Walmart (WMT) was exposed as a scam, Litecoin (LTC-USD) surged — then soon fell — giving crypto investors a new dose of volatility on Monday.
After a bogus announcement emerged early Monday claiming that the U.S. retail giant will allow users to pay in the digital currency, Litecoin soared to a high of 25% in about half an hour. LTC soared from $174 to a session high of $232 before crashing back to earth after Walmart debunked the false news release.
“As it pertains to Litecoin, the press release is not real,” a representative for Walmart said in a statement.
Litecoin was last hovering above $179 in midday U.S. trading.
Regulators are increasing their scrutiny of the free-wheeling world of crypto trading and lending, so the controversy surrounding the digital coin couldn’t have come at a worse time. Chairman of the Securities and Exchange Commission Gary Gensler is scheduled to appear before the Senate on Tuesday, and cryptocurrency is expected to be one of the main topics of discussion.
Some market participants quickly pointed out that multiple news outlets reported the story without first checking with Walmart, and linked the occurrence to “pump and dump” techniques common in stocks with little to no liquidity.
1) it’s not in their newsroom https://t.co/dtcvVCLrDS— Neeraj K. Agrawal (@NeerajKA) September 13, 2021
2) the wire account for “Walmart Inc” hasn’t posted anything else https://t.co/SLuxs5yO9X
3) the contact email is @ https://t.co/broFIRjHvB, which is owned by a squatter (h/t @tomhschmidt)
“Cryptocurrency is an extremely adversarial environment. News, be it good or bad, should always be verified at the source.” Neeraj Agrawal, communications director at Coin Center, a Washington D.C. based cryptocurrency nonprofit research and advocacy center, told Yahoo Finance.
“This type of thing is not unique to crypto,” he added.
Litecoin was established in 2011 by Charlie Lee, a former Google and Coinbase developer.
Litecoin is now the 13th most valued cryptocurrency, with a market valuation of $11.8 billion, according to CoinmarketCap. Before it fell off its peaks, the fraud added over $4 billion to that total.
Source: Yahoo News