A fast-spreading story about Litecoin sent the cryptocurrency higher before it was revealed to be bogus
Whether its politics, coronavirus, or cryptocurrencies, the open nature of communications in 2021 poses both opportunity and risk.
The ability to quickly spread information online, even if that information is wrong, was highlighted Monday as a fake story resulted in a gain for the crypto Litecoin.
The drama unfolded as one of the major press release distributors published news that appeared to come from Walmart announcing that the retailer would start accepting Litecoin in its stores.
The result? Widespread reporting of the story by media outlets and a 20% jump for the cryptocurrency’s value.
Even the Litecoin Foundation itself was caught out with a social media manager sharing the news of the partnership with Walmart on Twitter, which resulted in even more media coverage.
The foundation later commented on the “little too eager” sharing of the misinformation and making clear that there was no partnership between the two organizations.
An official statement regarding today's false news - Charlie Lee will be live on Bloomberg today at 2pm PST addressing the subject. pic.twitter.com/x7z7NZ02nZ— Litecoin Foundation (@LTCFoundation) September 13, 2021
The value of Litecoin has slipped back from its gains by Tuesday.
Risk for investors
Fake news has been prolific online and has frequently focused on politics and, in the past 18 months, falsehoods about the pandemic and vaccines.
However, the potential for investors to get caught out by fake stories regarding investment opportunities and for potential market manipulation is clear, especially where trusted media outlets are fooled into publishing the stories.
In response to the fake press release, Globenewswire.com issued a ‘notice to disregard’ and commented to CNBC that: “This has never happened before and we have already put in place enhanced authentication steps to prevent this isolated incident from occurring in the future,” adding that it will work with authorities on any investigation and criminal charges that may result.