The Breakdown - Of Course Walmart Isn't Accepting Litecoin

Episode Date: September 14, 2021

At 9:30 a.m. ET, a press release from “Walmart Inc” dropped today claiming that the company was partnering with Litecoin to begin accepting the 2016-era crypto darling at its retail locations. The news, seemingly fishy, was nonetheless reported as true by nearly every crypto outlet and numerous mainstream outlets, as well. In today’s episode, NLW breaks down: What happened and how the news spread The context clues in the release that should have aroused suspicion The smoking guns of fakeness in the release that REALLY should have aroused suspicion Why the scam was designed to target press Why the ensuing pump is likely to draw regulatory ire.  Enjoying this content?   SUBSCRIBE to the Podcast Apple:  https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M=   Join the discussion: https://discord.gg/VrKRrfKCz8   Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW   “The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: David Swanson/Bloomberg/Getty Images, modified by CoinDesk.

This was a scam designed to prey on the failures of click-based news. They knew that all press release wires are effectively the same. They're all just pay to play. And two, that given how much journalism is just a game of who publishes first, few were likely to take the time to vet this thing before reporting. I am sitting here so frustrated because this just poured absolute gasoline onto the fire of anyone trying to tell the world that crypto is just for scammers. Welcome back to The Breakdown with me, NLW.

It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. The breakdown is sponsored by Nidig and produced and distributed by CoinDesk. What's going on, guys? It is Monday, September 13th, and well, this is one of the we'reder mornings we've had in a while. I had planned to do a grab bag style show as there was a bunch of smaller news that was interesting, if not able to carry a full show. I mean, we had a lobster NFT Dow that raised CoinCenter's biggest donation ever. We had crypto funds like Pantara raising and Bain Capital announcing a crypto fund. We have the IRS and the Treasury focusing on crypto guidance. We even have a Dune NFT controversy of all things.

Time dependent, maybe I'll still hit some of these on the end. Certainly we'll cover them in the next few days, if not. But no. Instead, we're going to talk about lightcon. Unreal. So here's the story. This morning at 9.30 a.m., a press release was sent out over third-party wire services announcing that Walmart had formed a partnership with Lightcoin. Let's read the actual release here because A, it's been subsequently taken down, so consider this my attempt at preserving the record for posterity, and B, some of the details will be salient. Walmart announces major

partnership with Lightcoin. Source, Walmart, Inc. Bretonville, Arkansas, September 13th, 2021, Global Newswire. Walmart, Inc., NYSE, WMT, the number one U.S. retailer in the world's largest grocer, is pleased to announce a major partnership with light coin. The e-commerce giant intends to give its millions of shoppers across the world an opportunity to seamlessly make payments with cryptocurrencies. Quote, the momentum and excitement around the use of cryptocurrency are undeniable, and we are poised to make online shopping easy for our customers.

As a leading e-commerce store, we are committed to bringing innovations to the online shopping experience. By integrating Lightcoin, we will enable shoppers to experience a very smooth checkout experience with near-instant transaction confirmation and near zero fees regardless of where in the world they are. We're very excited to be working together with the Lightcoin Foundation and further innovate our business. Starting October 1st, all e-commerce stores will have implemented a pay-with-lightcoin option, said Doug McMillan, Walmart's CEO. Walmart has long been one of the earliest adopters of blockchain technologies, starting as early as 2016 to trial the digital ledger for improvements in its supply chain. Now, with this partnership,

Walmart will offer their shoppers to use Litecoin to benefit from the features of the cryptocurrency. Charlie Lee, Lightcoin's creator and CEO of Lightcoin Foundation, shared, LTC's super low fees and fast transaction times are perfect for a leading e-commerce store like Walmart. We are thrilled and extremely excited that our cryptocurrency is now supported by Walmart, opening up more opportunities for any merchants to accept Lightcoin in the future. While Lightcoin, released in 2011, Lightcoin is one of the oldest digital currencies in the crypto ecosystem. Lightcoin is similar to Bitcoin in that it uses the same code as the latter and shares many similarities. However, Lightcoin is cheaper and faster than Bitcoin.

Lightcoin is also a peer-to-peer cryptocurrency that facilitates cross-border transactions and enhances digital payment systems. Like Bitcoin, Lightcoin has no central authority. Lightcoin was designed to be used for cheaper transactions and to be more efficient for everyday use. While light coin requires more sophisticated technology to mine than Bitcoin, blocks are actually generated up to four times faster. Lightcoin also processes financial transactions a lot quicker. It then has an About Walmart section, a media section, and a website section. Okay, now you've heard the piece exactly, and there were two instant reactions among crypto people.

The first was something along the lines of, wow, that's big institution. institutional news. Really cool. The second, which was a much bigger percentage of the industry, was, wait a second, what are you talking about? Lightcoin? There's no way. Yes, those in crypto were skeptical that one of the world's biggest retailers would survey the landscape of available crypto payment options and choose. Not Bitcoin, not ether, not stable coins, not some integrated solution that put the power of the hands of the consumer and converted to Fiat on Walmart's behalf. But instead, light coin, a zombie chain with virtually no development that is just hungover from 2017 forever in people's bags. Right? I mean, the skepticism from crypto was obvious,

and people made that skepticism known quickly. At 9.50 a.m. Eastern Time, Niraj Agrawal from CoinCentor tweeted, Lightcoin Walmart press release is fake. He also offered three really obvious reasons why, which we'll get into in a second. Ten minutes later, Pomp amplified that, saying Walmart press release on Lightcoin is fake, don't fall for nonsense. The problem, of course, is that none of this stopped a slew of mainstream media outlets, including Reuters and CNBC, from immediately picking up the news. This podcast is sponsored by NIDIG, a firm that's making Bitcoin accessible to banking customers on Main Street and Wall Street alike, as part of their mission to bring Bitcoin to the people. Find out more at Nidig.com slash NLW. That's NYDIG-F, forward slash

NLW. Let's go back to what the signals were that something was fishy. The first is the obvious one I mentioned before, that there's just basically a snowball's chance in hell that any major retailer is going to work with Lightcoin in 2021. The second, I believe, is in the content itself. Some of these are pretty subtle, but as someone who's written a fair number of press releases, I think they're worth noting. First, the supposed quote from Walmart CEO has a strange phrase, we will enable shoppers to experience, a very smooth checkout experience with near instant transaction confirmation, that I just don't know any PR firm who would let that sort of phrase go through, but admittedly that's the most minor of my quibbles.

The second and more egregious is that Charlie Lee is not the CEO of the Lightcoin Foundation, because the Lightcoin Foundation doesn't have a CEO, it has directors, of which he is a managing director. That's a pretty big one. Third, there are some phrases that make me think this was not written by a native English language speaker. For example, now with this partnership, Walmart will offer their shoppers to use light coin to benefit from the features of the cryptocurrency. It's just super awkward phrasing that anyone who's paid for a living to write press copy wouldn't use. And finally, there's the two paragraphs of

awkwardly phrased pitch for light coin, rather than anything about Walmart's innovation, Walmart's creativity, Walmart's blazing the trail for other companies to follow suit, which is what would be at the end of a press release if it was really Walmart pushing it. The last line isn't something like, with this new partnership, Walmart cements its place as one of the world's most innovative retailers, but instead is Lightcoin also processes financial transactions a lot quicker. Now, those things might not seem major to you, but we have to remember that what we're discussing is the fact that mainstream media outlets reported this as true. And they're used to reading these sort of press releases. These are the sort of context clues that,

that it's not just me, but people in newsrooms should have, and frankly, have even better than I do. But I'm still burying the lead here. These, like I said, are all context clues for people who are used to reading press releases, but they're not the really big things. So what were those? Well, first of all, while this press release was distributed through a wire service, it was not shared via Walmart's official press site. It's kind of a big thing. Usually, when a press release goes out from a corporation that has a press site, it goes out simultaneous to that press release being on their site because people want to be linking back to their corporate site, not just the press release homepage. Second, if one reversed search the account of the company that

published the Wire, Walmart Inc. on the database of Global Newswire who it was pushed through, you'd have found that they never published anything else. Okay, weird. So we've got nothing on Walmart's site, plus no track record of other press releases with this Wire service Global Newswire. What about the press officer's contact email? It's Walmart-dashcorp.com. That's official, right? Nah, Walmart's corporate site is corporate. Walmart.com. So what about Walmart-dashcorp.com? Well, Stephen at the block, aka Doge Toshy, did a basic domain search and found out that Walmart-dash-corp.com had been registered just one month ago. The point is, the press release was clearly fishy. But Walter Bloomberg slammed the headline. Zero-Hedge slammed the headline. and most problematically by far is that the official Lightcoin account even tweeted it.

That, I think, will go down either as a stupid, uninformed click of a social media intern or as part of the fraudulent scam. Either way, Lightcoin moons. It jumps 30% in a few minutes, but it didn't take long before Walmart officially denied the press release. Every outlet changed back their story to say, oops, this was fake and adds to lightcoins price crashing again. Tweets were deleted to save face and so on and so forth. But then, I saw this tweet, and I just about lost my shit. It's from Nick Bilton, who's an author of Vanity Fair and New York Times journalist. He wrote, Lightcoin tweeted a bogus press release that Walmart planned to start

accepting Lightcoin. Mainstream outlets picked it up without checking even fake quoting Walmart's CEO, all part of a giant pump and dump, only a matter of time before the industry is heavily regulated. Look, you only need to read the comments to get a sense of what I was feeling when I read that. Ryan Selkis from Masari says, tell your colleagues to stop sucking at their jobs. Anthony Sasano says, so instead of calling out the abhorrent reporting standards of mainstream media, you call for regulation of crypto, LMAO, GTFO.

I personally couldn't help myself either and sub-tweeted news media, doesn't do its job fact-checking news, news media, shares bogus story, news media. It's crypto's fault. Regulate them. I still feel that way, but let's try for sanity's sake to break this apart just a little bit more. And let's start with media's role in this. This was a scam designed to prey on the failures of click-based news. They knew that all press release wires are effectively the same. They're all just pay to play. And two, that given how much journalism is just a game of who publishes first, few were likely to take the time to vet this thing before reporting. And that's exactly what happened. Everyone in

media, including sadly CoinDesk, decrypt, blockworks, and really everyone with the one exception this time of the block race to get it out first. It is ultimately the job of news organizations to get this sort of thing right. It may be normalized at this point to just trust whatever comes through the wires, but that should itself be questioned given that they're available to anyone willing to pay the thousand bucks or so to get them published. I really can't stress enough that this was a scam designed to target the media and it worked. Second, let's discuss the sophistication of the scam. I shared all the reasons why the press release shouldn't have passed the sniff test, but there were some who argued that overall, still, the scam was somewhat sophisticated. Frank Chaparro from the

block tweeted, I wouldn't be surprised if there is an organization or trading desk orchestrating fake pump news, Walmart and Lightcoin, Amazon accepting Bitcoin, CME Dogecoin futures, and profiting on the swings. This latest press release was the most sophisticated trick despite red flags. Stay vigilant and do your own research. Adam Cochran, who's now a crypto investor but has been in PR and marketing for most of his career, said, yeah, I will say that Walmart press release was actually well-written enough that I'd believe it was a mid-level PR person at an agency, and it was perfectly timed with the Eastern Monday Open had all the right names and right language. Seems it was a lot of planning and care. Knowing that a company would drop that kind of news around an open as well

as surprisingly niche knowledge that you only really find in financial markets and press releases that deal with Fortune 500s. I doubt even that the average crypto user would think of that either. Now, as you heard in my discussion, I don't think that it was particularly well written. I think there were many context red flags, but I still wanted to share that perspective because, obviously, I'm just one perspective, so is Adam. And I think it's worth noting that not everyone now that they're looking at it in retrospect is like, oh yeah, it was super clear. Also, Adam Cocker goes on to explain that this is sort of new precedent that in his time in press releases, he'd never seen an out-and-out fake press release pushed through the wires. He speculated that that was likely because traditional

financial markets just aren't volatile enough to respond to it in a way that would make it profitable, but clearly crypto can be. And ultimately, that's the thing that this is really going to come down to. I am sitting here so frustrated because this just poured absolute gasoline onto the fire of anyone trying to tell the world that crypto is just for scammers. Gary Gensler is testifying before the Senate Banking Committee tomorrow, and it's hard to imagine that this won't come up. It will reinforce the priors of people who don't like us. It'll make it harder for our allies promoting legitimate use to shift the narrative. Caitlin Long tweeted the agency that will go after today's scammer isn't the SEC.

It's the Department of Justice. And with Walmart's help and the help of all the news outlets that mistakenly fell for it, no doubt, law enforcement requests for info on who traded light coin already going out to the exchanges as we speak. So, as we round out this insane story and sipid and frustrating on so many levels, I'd just like to close with a hearty and official breakdown, fuck you, to the scammers behind this for all the muck and mess you'll cause in your wake. Grow up and trade JPEGs like everybody else. So until tomorrow, guys, stay safe and take care of each other.

Remember, friends don't let friends trade like coin. Peace.