The cryptocurrency markets received a fresh dose of volatility Monday after a hoax press release reported that retail giant Walmart would begin accepting Litecoin payments.
The hoax sent the cryptocurrency skyrocketing, reaching a nearly 30% gain at its peak.
Once Walmart discredited the press release, the price of Litecoin started coming back to earth. The digital asset was selling at $177 (£127.97) per coin, representing a 3% decrease on the day, by early afternoon EDT.
The hoax release comes at a time when cryptocurrencies are facing renewed scrutiny from federal regulators in the US. Securities Exchange Commission chair Gary Gessler is set to testify about cryptocurrencies before the US Senate Banking Committee on Tuesday.
"Frankly, at this time, it’s more like the Wild West or the old world of “buyer beware” that existed before the securities laws were enacted. This asset class is rife with fraud, scams, and abuse in certain applications. We can do better," Gessler's opening remarks say.
To compound matters, industry professionals seem confused about where the press release came from.
The Litecoin Foundation's director of marketing, Jay Milla, told Cointelegraph the Foundation “has yet to enter into a partnership with Walmart.”
Similarly, a Walmart spokesperson confirmed to The Verge that the press release is fake.
One crypto analyst said the event should be a stark warning to both cryptocurrency investors and media outlets that cover the asset.
Neeraj Agrawal of digital asset think tank Coincenter tweeted this event is not unique to cryptocurrencies and requires journalists to verify the information before disseminating it.
“The reason crypto publications fell for it is they race to be first on everything, not the first time this has caused problems,” Agrawal tweeted.
“The reason mainstream publications dropped this ball is simple," he added. "They generally don’t pay attention to cryptocurrency so they didn’t think to question ‘why did they choose Litecoin’.”
This is a developing story and will be updated.