Walmart caught up in suspected cryptocurrency scam

Sep 14, 2021
Fake press release announces partnership between Walmart and Litecoin

On Monday morning, Walmart appeared to announce that it would begin accepting cryptocurrency Litecoin for online purposes, in what CNN is calling a suspected pump-and-dump scheme.

Walmart quickly released a statement to clarify that the news release was false. The price of Litecoin rose from around $175 per coin to more than $230 but quickly fell again to $178.

‘Walmart was the subject of a fake news release issued on Monday, September 13, that falsely stated [we had] announced a partnership with Litecoin,’ the company’s statement says. ‘Walmart had no knowledge of the press release issued by GlobeNewswire, and it is incorrect. Walmart has no relationship with Litecoin.’

A number of news outlets, including Reuters, published news stories based on the announcement. One of these news stories was retweeted by the official account for the Litecoin Foundation on Twitter. The Litecoin Foundation subsequently issued a statement explaining that it had no involvement in the false media release and that ‘one of our social media team members was a little too eager and shared the story from the Litecoin Twitter account.’  

GlobeNewswire removed the initial, fraudulent press release and issued a notice to disregard it.

SEC eyes crypto action

There have recently been signs that the SEC, under Gary Gensler’s leadership, could crack down on cryptocurrencies, which remain largely unregulated. Last year, Gensler taught a class in cryptocurrency and blockchain at the MIT Sloan School of Management.

On September 1, the SEC’s Office of Investor Education and Advocacy and Division of Enforcement’s Retail Strategy Task Force released a statement warning investors about the risks of cryptocurrency scams. ‘Fraudsters continue to exploit the rising popularity of digital assets to lure retail investors into scams, often leading to devastating losses,’ the statement reads.

On September 7, Coinbase CEO Brian Armstrong published a Twitter thread in which he explains that the SEC recently halted the launch of Lend, which would have allowed Coinbase users to lend out cryptocurrencies and earn a reward. In the thread, Armstrong said that during a trip to Washington, DC in May, the SEC was the only government agency that that didn’t take a meeting with Coinbase after being contacted.

Public companies accepting cryptocurrency

A number of public companies – including Visa, Square, Overstock, Microsoft, PayPal, Tesla and AT&T – now accept some form of cryptocurrency for some purchases. Many of these companies also own cryptocurrency as part of their treasury.

One such company is Square. Speaking to IR Magazine in June, Nikhil Dixit, director of investor relations at Square, said: ‘From a shareholder perspective, it’s been an interesting journey. For our analysts, initially the revenue accounting we have to describe for Bitcoin adds a lot of noise for Gaap accounting. We’ve spent a lot of time educating our analysts about how to model on that.

‘The other dynamic is the volatility around Bitcoin and how it influences stock price. In periods where there’s significant changes in the price of Bitcoin, the important thing we have to explain is that it’s not the price that matters but the demand for Bitcoin.’

Earlier this year, Goldman Sachs looked at 19 companies that have integrated Bitcoin into some aspect of their business models and found that they had outperformed the S&P 500 by 34 percentage points.

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