On September 13, the GlobeNewswire had published a news story stating that Walmart was considering the option of offering its customers the ability to pay in cryptocurrencies through a partnership with Litecoin.
Fake news about Walmart boosts Litecoin price
The GlobeNewswire’s article, entitled “Walmart Announces Major Partnership With Litecoin” had spread the news that the American retail giant would implement the payment service with Litecoin to customers, starting on October 1.
Shortly afterwards, Walmart issued a press release stating that the news was fake:
“Walmart had no knowledge of the press release issued by GlobeNewswire, and it is incorrect. Walmart has no relationship with Litecoin”.
GlobeNewswire also quickly corrected itself, asking to disregard what was first published, but equally the price of LTC changed significantly within half an hour after the fake news spread.
The cryptocurrency increased its value by more than 30%, from $173 to $236. The price spike was immediate, as if the chain of shops had really allowed the crypto to be used for payments, its popularity would have quickly exploded, increasing its price and generating strong profits for Litecoin holders.
Equally sudden was the subsequent drop after Walmart’s statements, which saw the price of LTC fall to $177.
The hypothesis of a fraudulent press release
The Litecoin Foundation, a non-profit organization that promotes the cryptocurrency, also issued a statement on the matter. The foundation is run by Litecoin creator Charlie Lee, who serves as CEO.
Lee said he has no information about the origin of this idea or the press release, and confirms that he has not entered into any kind of partnership with Walmart.
Following the whole affair, Walmart Inc. has clarified that it is looking into how the fraudulent press release was issued. In addition, GlobeNewswire says it will also cooperate with authorities by lending a hand in the investigation, which will consider any possible criminal activity associated with this matter.
The CEO of the Litecoin Foundation, Lee, speaking to Bloomberg TV said:
“I deny that it has anything to do with us and we’ll try our best to figure out who did it — and we will stop fake news from spreading”.
Most experts reiterate the fact that any news about possible crypto acceptances for payments should be carefully analyzed and given due time. According to David Schwartz, project director of the Litecoin Foundation, chasing the news of the moment is a completely flawed strategy and that a long-term view should always be taken when investing.
At the time of publication, Litecoin is trading at a price of $181.5 and has a market capitalization of over $12 billion.