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Walmart Prank Temporarily Causes Short-Term Rally on Litecoin
Litecoin Rallies 25 Percent
One thing’s for certain. Walmart carries weight. According to cryptocurrency price-tracking website CoinMarketCap.com, Litecoin is not even among the world’s top ten digital currencies. However, despite its semi-obscurity, it still became the subject of a devious prank on the morning of September 13 when word went around that the U.S retail giant would begin accepting payments from its customers in Litecoin. Where before the hoax Litecoin had a market capitalization of $11.8 billion, it quickly jumped nearly another $4 billion before a quick descent back down.
Top News Outlets Were Duped
The release issued by what was later determined a fraudulent user account was picked up by GlobeNewswire at 9:30AM in New York and without verification was also carried by Reuters, CNBC and Bloomberg News. To make matters worse, a tweet from LTCs verified account actually linked to said release. And while Walmart quickly released a statement squashing the rumors followed by Litecoin deleting the tweet and confirming the falsity of the claim, the damage was already done.
An Environment Rife for Deceit
A full investigation has been launched into finding the scammers and holding them accountable, but the effort will likely prove difficult. The prank, however, highlights how easy it can be for unscrupulous actors to create havoc with unregulated currencies.
“This type of thing is not unique to crypto,” said Neeraj Agrawal, communications director at Coin Center, a non-profit that focuses on developing and advocating sound government policy toward digital currencies. Because of the adversarial environment surrounding crypto, Agrawal stressed the importance of always verifying information at the source.
An Argument for Regulatory Oversight
The fiasco supports the argument by regulators that the trading and lending of cryptocurrencies needs far greater oversight. On September 14 Securities and Exchange Commission Chairman Gary Gensler testified before the Senate Banking Committee on cryptocurrencies calling it a highly speculative asset class. In his arguments he called for such currencies traded over crypto-exchanges to first be registered with the SEC so that investors could be better protected.