Crypto investors got a fresh injection of volatility on Monday after Litecoin LTC-USD tanked — then quickly spiked — after news of a partnership with Walmart WMT exposed as a hoax.
Litecoin rallied as high as 25% in under half an hour, following a fake announcement circulated early Monday that stated the United States retail giant would allow customers to pay in digital currencies. It spurred LTC up from $174 to a session high of $232 — before it came back to earth once Walmart knocked down the fake press release.
As it pertains to Walmart, the press release is not fake, a representative for Litecoin said in a statement, which asserts a quote from CEO Doug McMillon.
Litecoin was last hovering above the top of $179 when midday trading from New York carried out it's trading.
The drama around the digital currency couldn't have been more ill-timed, with regulators ramping up their scrutiny of the free-wheeling world of crypto trading and lending. The chairman of the Securities and Exchange Commission is set to testify before the Senate on Tuesday - with crypto expected to be one of the top discussion items.
Some market players were quick to point out that several news outlets advanced the story without verifying it with Walmart, and compared the incident to pump and dump schemes popular in stocks with little liquidity.
Cryptocurrency is an extremely adversarial environment. News, whether good or bad, should always be verified at the source. Neeraj Agrawal, communications cirector at Coin Center, a Washington D.C. based cryptocurrency research and advocacy center, said Yahoo Finance.
This type of thing is not unique to crypto, he added.
Charlie Lee, a former Google and Coinbase Engineer, created Litecoin in 2011.
Currently, CoinMarketCap ranks Litecoin as the 13th most valuable cryptocurrency with a market capitalization of $11.8 billion. The hoax was nearly $4 billion added to that amount before it went off its highs.
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