Crypto Market in Recovery Mode After ‘Fake’ News Volatility Amidst Increased Regulatory Scrutiny
The mainstream media outlets decry crypto after jumping fast on the fake Walmart press release announcing support for Litecoin payments while CT started dissecting the news right from the moment it got published and declared it “fake.”
The crypto market had a rough Monday as rumors of crypto derivatives exchange FTX being hacked floated on Twitter which turned out to be fake.
FTX CEO and founder Sam Bankman-Fried then took to Twitter to clarify that,
“For those who don’t know, Bitcoin withdrawal processing involves combining together UTXOs from deposit addresses etc; a few days ago we consolidated some UTXOs into an address to make processing quicker.”
Before this, Litecoin (LTC) pump and dump news shook the market as crypto asset prices experienced a bout of volatility. Today, we are back on track, i.e., upwards with Bitcoin (BTC) trading above $46k, Ether (ETH) $3,300, and the total market nearly at $2.2 trillion.
However, the mainstream media outlets picked up on the fake Walmart press release announcing support for Litecoin payments pretty quickly.
This news sent the price of Litecoin up by more than 30%, only to tumble back on the ground after it became clear that the press release sent out by GlobeNewswire was fake. Walmart spokesman also confirmed the inauthenticity of the PR.
GlobeNewswire then issued a “notice to disregard” the original release and said that a fraudulent user account was used to issue the release. A spokesperson said,
“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.”
“We will work with the appropriate authorities to request – and facilitate – a full investigation, including into any criminal activity associated with this matter.”
Even the Litecoin Foundation tweeted out the fake news, which was then quickly deleted. In a statement, the Litecoin Foundation said one of their social media team members “was a little too eager” and shared the story and that they have taken steps to correct the future issues.
Charlie Lee, the creator of Litecoin and managing director of the Litecoin Foundation, also described the incident as an “unfortunate situation.”
The Crypto community started dissecting the news right from the moment it became public and already declared it “fake” with Neeraj Agrawal of CoinCenter noting how it was not in Walmart’s newsroom, the wire account for “Walmart Inc” didn't post anything, and Walmart’s contact email in the PR was owned by a squatter. Not to mention, the retail giant’s email domain used in the PR was registered just last month and didn’t link back to any official website.
In the aftermath, mainstream media is now talking about the industry needing regulatory oversight.
“It’s hard to know what’s legitimate in the anything-goes world of cryptocurrencies,” reads an opinion piece on Reuters.
These pump & dumps also take place in traditional markets. Pump & dumps are a form of market manipulation and are already illegal. https://t.co/GVlULzGlqm
— Alex Krüger (@krugermacro) September 14, 2021
Bloomberg also wrote that the incident “will only add to the perception that cryptocurrency is at best a play thing for investors and at worst a hotbed of corruption.”
Meanwhile, the article on Reuters talked about US regulators routinely cracking down on such scandals in the stock market and expects similar enforcement here.
“This happens with the regular stock market also. It happens a lot more with the regular stock market than with crypto,” said Litecoin creator Lee.
The Securities and Exchange Commission, meanwhile, has said it does not comment on such matters.
SEC Chair Gary Gensler has recently called crypto the “Wild West,” adding,
“This asset class is rife with fraud, scams, and abuse in certain applications. We can do better.”
Regulators around the world have already increased their scrutiny of the cryptocurrency industry and are working on trying to strike a balance in regulating the market to protect investors and punish the wrongdoers while ensuring that innovation continues to flourish.