Walmart Allows Litecoin Payments Fake Press Release Controversy
After Reporting Without Verifying Fake News, "No Basis" Announcement...Coin Price Volatility
Calls for Cryptocurrency Investor Protection Expected to Grow
[Asia Economy New York=Correspondent Baek Jong-min] "We also thought it was real." The news that Walmart would start accepting Litecoin payments struck the cryptocurrency market hard. The Litecoin Foundation, founded by Charlie Lee who created Litecoin, even believed the news was true and retweeted it, making it a sophisticated fake news.
On the 13th (local time) around 9:30 AM, a press release was issued through Globe Wireless, a press release provider, announcing that the major U.S. retailer Walmart would start accepting the cryptocurrency Litecoin as payment.
As major U.S. media outlets reported the news, Litecoin's price surged by 35% in an instant, soaring to $231. Cryptocurrency investors welcomed the entry of a major retailer into the cryptocurrency space. Other cryptocurrencies such as Bitcoin also rose alongside.
The situation changed rapidly as Walmart issued a clarification. Walmart urgently explained that the press release was fake news. Globe Wireless, the distributor of the press release, also acknowledged the incident and stated that it would strengthen the press release verification process and actively cooperate with authorities' investigations.
After Walmart's clarification, Litecoin's price plummeted sharply to around $180, down 2.5% compared to 24 hours earlier.
This incident raised concerns about fake news related to cryptocurrencies. Yahoo Finance reported that some investors strongly criticized major media outlets for reporting fake news based on press releases without verification.
The Wall Street Journal (WSJ) noted the emergence of fake news aimed at influencing stock prices in the cryptocurrency market as well. WSJ cited the example of Emulex, a Nasdaq-listed company in 2000, which fell by 60% due to a fake press release.
The cryptocurrency market has previously experienced significant volatility caused by baseless news. In July, multiple media outlets reported that Amazon would start accepting Bitcoin payments, causing Bitcoin's price to surge. This also turned out to be false after Amazon denied it.
This case may highlight the need for stronger cryptocurrency regulations. On the same day, Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), emphasized in his opening remarks for the Senate hearing scheduled on the 14th, "Investor protection related to cryptocurrencies is currently insufficient. It is like the Wild West era or a time before securities laws were enforced, where buyers bear the risks."
CNBC also predicted that senators would strongly demand cryptocurrency regulations during this hearing.
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