Litecoin jolted by Walmart hoax, exposing 'extremely adversarial environment' of crypto
Crypto investors got a fresh injection of volatility on Monday, after Litecoin (LTC-USD) spiked — then quickly tanked — after news of a partnership with Walmart (WMT) was exposed as a hoax.
Litecoin rallied as high at 25% in under half an hour, after a fake announcement circulated early Monday that stated the U.S. retail giant would allow customers to pay in the digital currency. It spurred LTC up from $174 to a session high of $232 — before it came back to earth once Walmart knocked down the fake press 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.
The drama surrounding the digital coin couldn't have been more ill-timed, with regulators ramping up their scrutiny of the free-wheeling world of crypto trading and lending. Securities and Exchange Commission Chairman Gary Gensler is set to testify before the Senate on Tuesday, with crypto expected to be one of the top discussion items.
Some market players were quick to point out that several news outlets advanced the story without verifying it with Walmart, and compared the incident to "pump and dump" schemes popular in stocks with little to no liquidity.
1) it’s not in their newsroom https://t.co/dtcvVCLrDS
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)— Neeraj K. Agrawal (@NeerajKA) September 13, 2021
"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.
Charlie Lee, a former Google and Coinbase engineer, created Litecoin in 2011.
Currently, Coinmarket Cap ranks Litecoin as the 13th most valuable cryptocurrency, with a market capitalization of $11.8 billion. The hoax added nearly $4 billion to that amount, before it came off its highs.
David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.
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