Walmart Inc., one of the world’s largest retailers, was at the center of a hoax aimed at manipulating the price of Litecoin, a peer-to-peer cryptocurrency and open-source software project.
The fake press release, issued by GlobeNewswire, claimed Walmart had announced a significant partnership with Litecoin. The news caused Litecoin to spike and quickly tank after the news was exposed as a hoax. According to some reports, Litecoin (LTC-USD) spiked at 25% in under half an hour, spurring LTC up from $174 to a “session high of $232.”
“As it pertains to Litecoin, the press release is not real,” a representative for Walmart said in a statement.
Various international news organizations picked up the fake announcement. Many people, however, quickly pointed out inconsistencies in the press release, noting how the fake news that circulated all morning shows how critical it is to conduct thorough research before falling for entirely fabricated news that are presented as factual.
In a statement, GlobeNewswire “advised that journalists and other readers should disregard the news release” and did not explain how or why the fake news release had been issued.
Recently, scammers have used social media and messaging apps as a contact method for investment scams. This trend is expected to continue, experts say. A survey conducted by The Motley Fool, for instance, found that almost 26,500 crypto scams were reported to the government in 2020, totaling losses of $419 million, with this year on pace to exceed those figures. More than 14,000 investment scams were also reported to the Federal Trade Commission in the first quarter of 2021 alone, with $215 million in losses.
Though creating and spreading inaccurate information is not a new tactic altogether, the increasing frequency and reach of fake news, misinformation and disinformation on social media can have a devastating impact on businesses, with consequences including reputational damage to significant financial loss or even create unreasonable customer expectations.
Karl Steinkamp, Director, PCI Product and Quality Assurance, Coalfire, explains, “What we saw today with the false news post by GlobeNewswire (and the bandwagon of news media outlets that jumped onboard) after an initial string of large influencer Twitter posts about Walmart adopting the altcoin, Litecoin, for crypto-asset purchases isn’t unique to crypto. Due to the speed of news distribution, social media can be a double-edged sword. If done properly and with good intentions, it serves as an effective medium to help countries, governments, businesses and their customers make better decisions in a more timely manner. If done with bad and/or malicious intent, it serves only to further the agenda of those who distribute this type of “news,” which may include ‘pump and dump,’ malware propagation, and/or political messaging schemes. Those individuals who executed this news post and promotion scheme likely netted 70% return in about 20 minutes. Upon the release of the information and verification of it being false, many in social media were quick to call it out as false. Media outlets and those on social media still need to do their due diligence, and fact check the information before blindly accepting it as fact and publishing it.”
A new peer-reviewed study by researchers at New York University and the Université Grenoble Alpes in France will show that misinformation got six times as much engagement on Facebook as real news. Erich Kron, Security Awareness Advocate, KnowBe4, says the Litecoin scam shows the power of fake news and misinformation on social media and how it shapes our world.
Kron says, “While effective, this scam was not technically difficult at all and could be pulled off by just about anyone with an internet connection and an hour or two of free time. Domain spoofing, the practice of making a lookalike domain as was done in this case, is a very effective tool to trick unwary people into believing something comes from a legitimate source, when in fact, that is far from the truth. This technique is used extensively in email phishing campaigns to get the potential victim to trust the message, give up sensitive information, or click on malicious links or documents.”
Unfortunately, Kron adds, internet domain registrars generally do not police these types of domains, so for under $20 and about 30 minutes, a bad actor can set up the internet domain and have a website hosted and ready for deception. Kron says, “Like in phishing campaigns, education about how to spot legitimate domains in the crowd of fakes will go a long way to keeping people from falling for scams such as this. When in doubt, going directly to the legitimate brand’s website or social media account will usually shine the light on this type of deception very quickly.”