Crypto becomes the new frontier of fake news

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Two recent fake press releases show how easily the cryptocurrency markets can be manipulated, adding to the perception that the growing industry is a new Wild West.

Catching up fast: Litecoin’s price climbed around 30% after a fake press release last month that was supposed to be released by Walmart said the retailer will accept litecoin as online payment and cited the creator of Litecoin.

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As of Friday, the price of XRP jumped at least 4% after a false statement said the Securities and Exchange Commission dismissed a lawsuit against Ripple, the company behind XRP.

Walmart, Litecoin and Ripple all quickly moved away from fake news and confirmed their fraudulent nature, while news outlets including Reuters and CNBC had to remove or update their original stories.

Why it matters: Fake news and pump-and-dump systems are not new phenomena in financial markets and have moved to crypto markets.

In early 2017, for example, the SEC accused more than two dozen companies and individuals of promoting stocks through secretly paid articles on Yahoo Finance, Forbes.com and other sites.

A year later, dozens of trading groups manipulated the price of cryptocurrencies, causing hundreds of millions of dollars in losses, according to the Wall Street Journal.

GlobeNewswire, the service that was used to issue Walmart’s fake press release, said in a statement that the company has never encountered an incident like this before and has improved its authentication process. . He will not share details with the public, in order to ensure the highest level of security.

What they’re saying: There are a lot of regulatory issues and uncertainties in the industry, Max Dilendorf, a cryptocurrency lawyer, told Axios.

What to watch: SEC Chairman Gary Gensler has pledged to crack down on cryptocurrency markets this summer, saying activity in the industry is rife with frauds, scams and abuse.

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