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“Fakes” in the cryptocurrency market: who benefits from it?

 

On September 13, the Litecoin exchange rate first soared 40% and then collapsed back to its previous value. It was probably due to price manipulation. Experts told why it happened and who could be behind it.

On Monday, a release allegedly from the largest U.S. retailer Walmart appeared online announcing a partnership with the Litecoin Foundation. The authenticity of the information was confirmed by its publication on the blockchain project’s official Twitter account. Within 15 minutes, the altcoin’s price was up 40%, to $240, but it had fallen back to around $180 when the tweet was deleted and a Walmart spokesperson said that the content of the release was untrue.

Later, Litecoin cryptocurrency creator Charlie Lee responded to the incident. He stressed that the project had nothing to do with what happened and would do everything possible to identify those involved. Lee reminded that anyone can start accepting altcoin for payment without prior agreement with the project.

However, the cryptocurrency community found suspicious the fact that the fake news was published on the project’s official Twitter. There was speculation that the team was involved in artificially inflating altcoin quotes for its own benefit.

This is not the first time Charlie Lee or his project has been suspected of something like this. The most famous case occurred in 2017. At that time, Lee was accused of manipulating the value of his own cryptocurrency by publishing posts on Twitter. After that, in December 2017, he wrote that he sold all the LTC he owned.

At the time the Litecoin creator reported selling his coins, their price was at a peak of about $360. After that, a prolonged downward trend began, as a result of which the value of LTC fell by 94% to $22 during the year. The altcoin was able to renew the historical maximum only in the spring of 2021, and its price exceeded $410 for the first time.

The latest “fake news” about Walmart’s partnership with the Litecoin Foundation was thrown in via the blockchain project’s official Twitter account, which was managed by an employee. That means the throw-in may have been orchestrated with the team, said Xena Financial Systems CEO Anton Kravchenko. He added that employee error and the fact that the project may indeed be uninvolved cannot be ruled out.

“Launching such a viral fake is possible if you prepare well and have someone from the opinion leaders to help,” Kravchenko explained.”

Such “fakes” are not uncommon in the cryptocurrency market. For example, in the summer, information appeared on the network about Amazon’s intention to begin accepting payments in bitcoin by the end of this year. However, it was refuted the very next day by the company’s spokesperson.

Fakes are launched by well-known but anonymous traders on Twitter, social networks and forums, co-founder of ENCRY Foundation Roman Nekrasov explained. In his opinion, this is most likely engaged by professional speculators in the cryptocurrency market who understand the mechanisms of manipulating the mass consciousness of players. Such manipulators use their competencies to extract their own profits, probably are private managers of crypto-assets, under the management of which there are coins belonging not only to themselves, but also to their clients, the expert believes.

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