Kroger, Cision Probe Crypto Hoax After Fake News on Bitcoin Cash
Kroger Says Bitcoin Cash Release on Its Website Was Fraudulent
(Bloomberg) --
Kroger Co. and a press-release distributor are investigating a fraudulent announcement saying the grocer would begin accepting payment in Bitcoin Cash -- the second apparent scam in less than two months to tie a major retailer to cryptocurrency.
The statement appeared early Friday on PRNewswire, a unit of Cision Ltd. that is used by many large companies to make official announcements. Kroger’s investor-relations website automatically picked up the release, and media organizations including Bloomberg News published the information. Bitcoin Cash briefly spiked about 5%.
“This communication was fraudulent and is unfounded and should be disregarded,” Kroger said.
The episode recalled a similar hoax in September involving Walmart Inc. In that situation, a fake statement went out on a separate wire service, GlobeNewswire, saying the retail giant would begin accepting the cryptocurrency Litecoin. The fake news release set off a short-lived surge of more than 30% in Litecoin before Walmart said the information was false and the statement was taken down.
Responding to the Kroger incident, PRNewswire and Cision said they take “the subject of misinformation seriously and have multiple security measures in place to authenticate information. We have withdrawn the fraudulent release and are urgently investigating the incident.”
The probe includes looking at “any criminal activity associated with this matter,” PRNewswire and Cision said.
While fabricated releases aren’t new, cryptocurrencies would seem to provide fertile ground for deception. Unlike in stocks, trading is mostly untraceable, so scammers leave few tracks. And traders have become conditioned to expect outsize price reactions to even flimsy announcements.
Kroger dropped 2.8% to $42.21 at 12:47 p.m. in New York, the biggest decline on an S&P index of U.S. consumer staples companies. Bitcoin Cash fell less than 1%, according to data compiled by Bloomberg. Bitcoin Cash, which has tumbled by more than half in the last six months, is an offshoot of Bitcoin, the largest cryptocurrency.
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