Walmart-Litecoin Sham PR Should Be Reminder for Due Diligence

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Recently, Walmart was the subject of a fake news release, which announced that the big box giant established an agreement with Litecoin that ultimately would end in the retailer accepting the cryptocurrency as an accepted method of payment.

While the Twitterverse buzzed with skeptics, Litecoin immediately jumped over 20% before tumbling back toward reality.

In the aftermath, everybody was pointing fingers at where the blame lay. Walmart said it had “no knowledge of the press release issued by Globe Newswire,” further noting that the company had “no relationship with Litecoin.”

Globe Newswire, the company which launched the release, advised that the statement be disregarded.

Commentators pointed out that last month there were reports ruminating that Walmart aimed to hire somebody to develop a digital currency strategy, but that since that point there had not been an executive named to fill that role or one which would similarly deal with such a development.

In the end, good old-fashioned context clues won the day – until Walmart was able to provide clarity.

The hoax drew news articles from within the industry, as well as the broader financial markets, and many experts noted that they expect more scams of a similar nature.

The fact is that fake announcements like this have been used within the crypto sphere and within other arenas as well. This isn’t new, though, –the methodology, using a press release, is far more advanced than many of the pump-and-dump schemes we’ve seen in the past.

This event gives live ammunition to those claiming that the cryptocurrency and blockchain industries should be squashed for public safety. The truth, however, is different. Blockchain technologies could be utilized to save tens of thousands of lives by using its specialized ledger technology to blunt the flow of counterfeit pharmaceuticals into the marketplace.

They could be used to limit the market for blood rubies by providing better logistical chain of custody and origination documentation. Currently, cryptocurrency is widely used by those in nations with high rates of inflation as a way to store value. And central bank digital currencies (CBDCs) – the future of digital assets – are destined to bring a sizable percentage of the unbanked population into our financial system while simultaneously making cross-border transfer less expensive and more efficient.

In essence, digital assets will change the way we interact with the financial markets. And with so many central banks in a race to develop, test and implement their own digital asset, it is only a matter of time until digital assets are pervasive.

China, for instance, has been testing its e-yuan for months. What that means is that detractors are using this well-publicized hoax as a way to push their narrative. Even though they will be on the wrong side of history today, they are getting PR mileage out of this debacle.

The truth is a tad grayer than detractors would like to admit. First, digital assets are here to stay – period. Secondly, bad actors will attempt to disturb and draw wealth from any industry and arena where wealth is available.

For that reason, crypto scams do occur, as they do in other areas where chicanery can net the bad guys a payday. Finally, the best guard against scams of any kind is due diligence on the part of the investor.

The fact is that the crypto markets need greater regulatory oversight from the government. Not just heavy-handed regulation, but regulation that makes sense and actually increases safety in the markets – especially as related to AML and KYC compliance.

Nevertheless, at the end of the day, even if governments responded with appropriate regulation that protects consumers while encouraging innovation, there will always be bad actors. The fact remains that one of the best tools a consumer or investor has to protect themselves is now and always has been – due diligence.

Richard Gardner serves as the CEO of Modulus, an international financial technology firm. He has been a globally recognized subject matter expert for more than two decades, offering complex insight and analysis on cryptocurrency, cybersecurity, financial technology, surveillance technology and blockchain technologies. Richard’s ideas have been published by Forbes, Reuters, CIO Magazine, NASDAQ, Business Insider, the Detroit Free-Press and dozens of other regional and industry-related publications, as well as by leading international outlets, including Novinite (Bulgaria), News Ghana and Morocco World News, among many others.

Featured Image: Shutterstock/Pavel Chagochkin