After reports of a collaboration with Walmart (WMT) was exposed as a fake, Litecoin (LTC-USD) soared — then immediately plunged — giving crypto investors a new dose of volatility on Monday.
After a false statement emerged early Monday claiming that the U.S. retail giant will enable consumers to pay with the digital currency, Litecoin surged to a high of 25% in just half an hour. LTC soared from $174 to a session high of $232 before crashing back to earth after Walmart debunked the bogus news release.
According to the poll, the Federal Trade Commission received over 14,000 investment fraud reports in the first quarter of 2021, totaling $215 million in damages.
Regulators are increasing their scrutiny of the free-wheeling world of crypto trading and lending, so the turmoil surrounding the digital coin couldn't have come at a worse moment. Chairman of the Securities and Exchange Commission Gary Gensler is scheduled to appear before the Senate on Tuesday, and cryptocurrency is anticipated to be one of the main topics of discussion.
Meanwhile, according to a Motley Fool study, almost 26,500 crypto frauds were reported to the authorities in 2020, totalling $419 million in losses, with this year on track to surpass those statistics.
Some market participants quickly pointed out that numerous news sites reported the story without first checking with Walmart, and linked the situation to "pump and dump" strategies common in equities with little to no liquidity.
Litecoin was founded in 2011 by Charlie Lee, a former Google and Coinbase programmer.
Litecoin is now the 13th most valued cryptocurrency, with a market valuation of $11.8 billion, according to CoinmarketCap. Before it fell off its peaks, the scam contributed roughly $4 billion to that total.