Litecoin had a terrifying night. The black hands in the cryptocurrency circle played tricks on everyone.

There is never a lack of magic in the cryptocurrency world.

On September 13, news that Walmart announced that it would support online payments using Litecoin spread across global social networks.

The official Twitter account of the Litecoin Foundation retweeted the news of the cooperation; overseas authoritative media such as Bloomberg, Reuters, and CNBC reported on it; domestically, many first-line media outlets retweeted the news.

Influenced by the good news, LTC instantly soared by more than 28%, and led to a collective rise in other cryptocurrencies such as Bitcoin.

Cryptocurrency investors were in high spirits and chased the rise. However, after just a few minutes, Litecoin's official Twitter account deleted the tweet about the Walmart collaboration, and Walmart came out to clarify that this was fake news.

LTC plummeted in an instant, from a 28% surge to a 1% drop, and also brought down the entire market. A series of gate-shaped K-lines will tightly trap investors who have been liquidated and stuck.

According to bybt data, within an hour after the news was released, the overall liquidation volume of the crypto market exceeded 200 million US dollars.

How did the mastermind behind the scenes fabricate fake news and deceive most of the world's mainstream media and investors?

Why have authoritative media such as Bloomberg and Reuters failed in the cryptocurrency circle?

Who will be responsible for investors' losses?

How fake news spreads

Looking back at this fake news incident that harvested the cryptocurrency world, we cannot ignore Globenewswire.

Among the global news agencies, in addition to professional news organizations such as the Associated Press and Thomson Reuters, there is also a special type of entity, commercial and financial news agencies.

This type of news agency can be regarded as a "public relations company". Its core business is to charge companies and publish corporate press releases to global media channels, including press release releases, public opinion and online media monitoring... This type of news agency mainly includes PR Newswire, Business Wire and the protagonist of this time, Global Correspondent.

Usually, when some companies announce important news, they will publish official PR articles on platforms such as PR Newswire, and then distribute them globally.

The mastermind behind the scenes seized the loophole and manipulated the market with fake news.

First, in August, the black hand registered a domain name walmart-corp.com that appeared to be related to Walmart and applied for an email address.

Subsequently, to register WalMart Inc with Global Telecom, you only need to fill in four sets of information including company information, personal information, and contact information to complete the registration application, and the staff will complete the review within two days.

This is also the most critical step in the whole incident. Obviously, the black hand successfully deceived the background review through the fake domain name related emails and other information, and the registration was successful. According to the tail information of the fake press release, it can be inferred that the black hand pretended to be Walmart CMO William White to register.

On September 13, a day when the cryptocurrency market continued to fall, the black hand officially started working and released a PR article "Walmart announced its cooperation with Litecoin" on Globenewswire.

It is worth mentioning that the content of the manuscript is a standard news release, which contains both "news facts" and "interview" information with the main persons in charge of both parties. It is difficult to detect anything unusual in the content.

The news then spread, and the Bloomberg terminal captured the news. Reuters, CNBC, Yahoo Finance, Coindesk and other media also reported it on the headlines, and domestic media also forwarded it.

Instead of verifying the facts with Walmart officials, they directly quoted the "fake news" from Globenewswire.

More importantly, Litecoin’s official Twitter account also retweeted this fake news release, dispelling the doubts of many investors.

Influenced by the good news, the cryptocurrency market rose in an excited mood, LTC rose rapidly, with the increase once approaching 30%, and led to the rise of other assets such as Bitcoin and Ethereum.

However, someone soon noticed something was wrong.

First, this news was not found in the news center of Walmart's official website; second, Walmart Inc, which released the information, only released this news; walmart-corp.com in the contact email was registered in August...

Of course, the most puzzled one was Walmart. When the news that Walmart accepted Litecoin payments appeared in major media, spokesman Randy Hargrove urgently refuted the rumor.

The spokesperson said the company has no partnership with Litecoin and that Walmart has contacted Globenewswire to investigate how the false press release was published.

Litecoin’s official Twitter account also deleted content about its partnership with Walmart.

Is Litecoin official the mastermind behind this fake news incident?

In an interview with Bloomberg, Litecoin founder Charlie Lee said he only has about 20 Litecoins and has no motivation to participate in such plans to increase the value of the cryptocurrency.

He explained that the announcement of the partnership with Walmart on the company's Twitter account was a mistake "caused by overexcitement" and that the false announcement was "an unfortunate state of affairs."

After Walmart refuted the rumor, media outlets such as Reuters and CNBC deleted their articles and clarified the situation. However, for investors who rushed in to chase the rising prices, there is no regret medicine.

Who will punish the mastermind behind this?

For the masterminds behind fake news, the profit model is simple and clear.

Before the fake news was released, long positions in LTC futures contracts were established. When the fake news fermented and was reported by mainstream media, LTC rose sharply and the long positions were closed. At the same time, short contracts were arranged at high levels, waiting for the rumor to be dispelled, and when the LTC price was reduced to its original state, the short positions were closed.

Back and forth, two-way harvest.

In order to avoid exposing their identity, the mastermind used the anonymous identity service provided by the Icelandic company "Withheld for privacy" when registering the domain name.

Who will sanction such arrogant market manipulation?

In traditional capital markets, whether in China or the United States, spreading false or uncertain material information constitutes manipulation of the securities market, which is a criminal offense.

In China, according to the Criminal Law Amendment (XI) passed in 2020, the amendment increases the maximum prison sentence for those responsible for information disclosure fraud such as fabricating and disseminating false information about securities transactions from 3 years to 10 years.

In the United States, the Litecoin fake news incident has caused public outrage.

Nick Bilton, director of the hit HBO series "FAKE FAMOUS", tweeted that these market manipulation practices will eventually lead to severe regulatory crackdowns, and it is only a matter of time.

Caitlin Long, founder of Avanti Financial Group, tweeted, “Today, it’s not the SEC that’s dealing with scammers, it’s the DOJ. As we speak, law enforcement is sending information requests to exchanges about who is trading LTC.”

In addition to the mastermind behind all this, Globenewswire and the Litecoin Foundation are also to blame.

At present, the fake news has been deleted. GlobeNewswire stated that the company is strengthening the verification work before the release of information and will cooperate with relevant agencies to fully investigate the false announcement of Walmart’s partnership with Litecoin.

They stressed that this was just an "isolated incident that has never happened before".

The Litecoin Foundation issued a statement regarding the incident:

We feel the need to comment on the recent fake news regarding the Litecoin Foundation and Walmart announcing a partnership. This is not true and the Litecoin Foundation does not have any kind of partnership with Walmart.

This morning, a fake press release that looked official was sent out on GlobeNewswire. It is not our policy to announce partnerships in this manner. The quote on the article itself was also fabricated and did not come from Litecoin founder Charlie Lee.

Several media outlets including Reuters did report the story first, and in response one of our social media team members got a little too eager and shared it on the Litecoin official Twitter, but this was quickly deleted and we have taken steps to correct the issue going forward. Our marketing team has been responding to inquiries and this is indeed false.

Using the media to manipulate the market

In the relatively disordered and chaotic cryptocurrency world, it is not uncommon to use some news to influence the market, and it has even become the default means to a certain extent.

Cryptocurrency blogger “Two Comma Pauper” explained in May this year what he saw and heard, and how to use the media to create momentum to short the market.

He entered the cryptocurrency market in 2016 and founded a service that mainly engaged in four types of work.

Legal and Regulatory Services

Solidity development, helping to develop “shitcoins”

Marketing and public relations to help the project build momentum

OTC

If you want to short the market, you usually choose to do the following:

The first step is to pay a few low-level media outlets to publish bearish news, but not promote it on their channels, just leave it there temporarily.

The second step is to pay several writers such as Bloomberg/Forbes to quote the article in their reports. In his opinion, this is easy because:

(1) Writers need money more than others (the meme about starving writers is real)

(2) They themselves are in urgent need of fresh content

(3) Remuneration is related to the traffic their stories generate

Note: Some people have questioned the price list provided by Pauper, and its authenticity remains to be verified.

Then, you want this content to appear on some low-level news sites and some high-profile sites at the same time.

At this time, the "dealer" can take out the address book and call those technical analysis experts with whom he has "good relationships" to ask them to participate.

The content is available on various websites from NewsBTC to Reuters, and is all legal.

These analysts post these stories or variations of them on Twitter, and take advantage of human nature and emotions to select key words to spread, such as "policy ban" and "hacker".

Then, the "market makers" need to cooperate with the algorithmic mechanism to initiate dumping. They will choose exchanges with relatively poor trading depth to carry out large-scale market crashes, thereby exacerbating the panic of retail investors.

When retail investors sell off in large numbers, they have already placed buy orders at the bottom and picked up the bloody chips.

In the dark forest of the crypto world, there are always shotguns lurking everywhere. (Deep Tide)