Walmart and GlobeNewswire Investigate Crypto Deal Misrepresentation

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According to the statement on GlobeNewswire at 9:30 a.m. in New York, Walmart would start letting its customers pay with Litecoin, a relatively obscure instrument that is not among the top 10 cryptocurrencies, according to CoinMarketCap.com. The statement was initially covered by Reuters, CNBC and Bloomberg News, fueling a 33% jump for Litecoin. In less than an hour, the retailer denied the claim, wiping out most of the gain and sending the broader cryptocurrency market shuddering. Litecoin also later confirmed that the announcement was false.

The company and the newswire say they are now looking to determine how events unfolded. Tracking down the perpetrator could prove difficult in the dark world of crypto transactions, and the episode may well bolster criticisms who argue that without regulation, digital currencies are susceptible to interference from unscrupulous players.

GlobeNewswire is working with authorities on an investigation, including any criminal activity associated with this case, ”according to an emailed statement from Intrado, which operates the news wire.

This has never happened before and we have already implemented improved authentication steps to prevent this isolated incident from happening again in the future, ”said Intrado. Intrado, which is controlled by Apollo Global Management, distributes 200,000 press releases per year, according to its website.

Adding credibility to the news right after the false claims emerged was a Twitter post from the verified Litecoins account, which was linked to the post. This tweet was deleted after the ad was found to be false, said Charlie Lee, creator of Litecoin and CEO of the Litecoin Foundation.

In an interview on Bloomberg TV with Emily Chang, Lee said he only owns around 20 Litecoin tokens and has no incentive to participate in any programs that could pump the value of digital currency.

It’s really bad that this is happening, and we really need to think about it, “Lee said, adding that his foundation had really messed up” as he tweeted about the release. He said he had limited tools to investigate what had happened and GlobeNewswire should investigate the incident.

The event shows how misrepresentation remains an acute risk for newswire operators who issue the releases that dictate the daily flow of US financial markets.

If you put out a press release that can move the markets, you have enormous potential for harm, ”said Kathleen Culver, director of the Center for Journalism Ethics at the University of Wisconsin. If you were someone who saw this, made purchases and then it all came back to Earth, you could lose a lot of money. “

While the manufactured versions are not new to the market, cryptocurrencies appear to be fertile ground for deception. Unlike stocks, most trade is nowhere to be found, so scammers leave little behind. And traders have become conditioned to expect outrageous price reactions to the weakest of announcements – when, for example, Elon Musk checks the name of a project on Twitter.

We realize how powerful a single tweet can be these days, “Lee said. It was overwhelming about the news. It happens.”

No relation

Walmart said it had no relationship “with Litecoin in a statement after a representative told Bloomberg News that the company was trying to find out more about the flawed press release. The Litecoin Foundation said in a statement. tweet that she had not entered into a partnership with Walmart.

Litecoin rose 2% at 4:14 p.m. in New York City. Walmart shares slipped less than 1% to $ 145.06 at Monday’s close after earlier trading in positive territory.

Cryptocurrencies are of course not the only markets where bad information has caused prices to move. The SEC has prosecuted individuals for issuing false press releases in recent years. The agency often relies on timely stock transactions to find out who is behind the hoax, but it might be more difficult to unravel this hoax because the cryptocurrency is designed to be anonymous. The SEC, which declined to comment, has limited access to data on crypto transactions at the right time and will likely have to look to unregulated platforms for more information.

Even highly regulated markets like the stock market can be manipulated this way, ”said Jeffrey Timmermans, professor of business journalism at Arizona State University. people who are also likely to engage in rumors and speculation. ”

It is not known if the episode will deter large companies from partnering with cryptocurrencies in the future. Their use has exploded in recent years, with El Salvador even going so far as to adopt Bitcoin as legal tender, but questions about their susceptibility to interference and pumping and dumping systems have fueled skepticism in many corners of the market.

However, companies are preparing for further integration. Walmart announced a position earlier this year to develop the digital currency strategy and product roadmap “while identifying crypto-related investments and partnerships,” according to a job posting posted on the site in August. Company web.

As far as it is harmful to crypto, it also happens with the regular stock market, ”said Litecoins Lee. This happens a lot more with the regular stock market than with crypto. But I have seen this happen several times with crypto.

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