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The price of litecoin momentarily soared on Monday morning after a press release falsely claimed Walmart would allow online shoppers to pay for purchases using the cryptocurrency.
The release that appeared on the GlobeNewswire distribution platform claimed the world’s largest retailer had formed a partnership to allow litecoin as a method of payment for its ecommerce stores beginning in October.
Topped with Walmart and litecoin logos, it included statements attributed to Doug McMillon, Walmart chief executive, and Charlie Lee, the creator of litecoin.
Litecoin rose as much as 32.8 per cent to $235.88, according to Bloomberg data. Within 30 minutes it began to retreat and was trading up less than 1 per cent at $178.21 at midday on Monday.
GlobeNewswire soon removed the press release from its website and posted a message saying that “journalists and other readers should disregard” it. On Monday afternoon, the company said it “became aware this morning that a fraudulent user account was used to issue an illegitimate press release”.
“This has never happened before,” said GlobeNewswire, whose parent company, Intrado, is owned by the Apollo Global Management private equity firm. The company said it has added authentication steps to prevent such an incident from happening again.
“We will work with the appropriate authorities to request — and facilitate — a full investigation, including into any criminal activity associated with this matter,” GlobeNewswire said.
The bogus release appeared to harness enthusiasm that cryptocurrencies may one day be adopted as a medium of exchange. Only a handful of retailers and consumer brands have embraced crypto payments, including Overstock.com, the ecommerce company. The electric carmaker Tesla said it would accept bitcoin before backtracking in May in response to environmental concerns.
News outlets including Reuters and CNBC initially reported on the announcement before issuing updates or withdrawing their original articles. A Twitter account called @Litecoin, which has 761,000 followers, deleted an initial tweet that included a link to the phoney press release.
Fake news releases have swayed Wall Street before. In 2015, the US Securities and Exchange Commission sued a Bulgarian trader who it claimed posted a bogus takeover bid for cosmetics maker Avon.
The trader, who crafted fake press releases and had the fictitious buyout offer published through the SEC’s online corporate filing repository, was able to sell his shares at artificially inflated prices before the near 20 per cent rise in Avon shares evaporated, the US securities regulator charged.
Walmart on Monday afternoon said it was “the subject of a fake news release” that falsely announced a partnership with litecoin.
“Walmart had no knowledge of the press release issued by GlobeNewswire, and it is incorrect. Walmart has no relationship with litecoin,” the company said, directing all further questions to GlobeNewswire.
The Litecoin Foundation, a non-profit group which promotes the cryptocurrency, called a partnership with Walmart “false news”. It acknowledged that a member of its social media team members was “a little too eager” and shared the early Reuters story on the Litecoin Twitter account, before it was deleted.
The SEC and the US Commodity Futures Trading Commission, another markets regulator, declined to comment on the incident.
Additional reporting by Stefania Palma in Rome
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