When ignoring journalism basics is somebody else’s fault.
It was a curiosity yesterday morning in the digital currency exchanges that only lasted a couple of hours. A story surfaced as the markets opened involving the cryptocurrency Litecoin, where it was announced that Wal-Mart would begin accepting the currency in transactions. After an initial announcement, the story was picked up by CNBC, and Reuters, and this led to a spike in interest that saw prices for Litecoin shoot up 25% at one point. The issue: The entire story was not true at all.
While the entire drama played out in the somewhat insular realm of financial news, it is no less illustrative of the conditions in the media complex as a whole. An industry that was incensed anytime former PresidentTrump would accuse them of trafficking in fake news has shown numerous times of late how it operates exactly in that fashion. To get into the latest example, here, first, is the story.
A press release went out that declared Wal-Mart would begin accepting Litecoin as an acceptable payment for purchases in its online portals. This would be accepted globally for any internet-based shopping. Reuters even reprinted the press release.
— Reuters (@Reuters) September 13, 2021
The origin of this press release was the GlobeNewswire service, a syndicate that sends out PR notices to news outlets. It originated in its network from an account and was sent out at 9:30 am. Minutes later, the notification was retweeted on the Litecoin official Twitter account, and soon thereafter, a number of news outlets picked up on the headline and repeated the news. The price of Litecoin rose by over 27%, before dropping back down to its normal trading level after an hour when the falsification was reported.
So how did this happen? Well, a number of red flags were ignored in the rush to repeat the news. The first is that the press release originated from a new user account in the GlobeNewswire network. The second would be that Wal-Mart does not use this syndicate for its public announcements. While these might be offset onto the PR company, the other telling activity is that at no point did the news outlets reach out to either Wal-Mart or Litecoin for comment/confirmation.
CNBC, in a report after the fact, detailed some of what happened, but in it, they also exposed the methodology that tripped them up.
Litecoin tweeted the press release from its official account at 9:50 a.m. ET. CNBC’s report on the what turned out to be fake was published five minutes later.
Five minutes elapsed and no calls for confirmation were made, nor an attempt at getting official quotes. Nobody went on the record before pushing the story. Reuters was no less lax in its tactics, but in one post-mortem report, it attempts to pass off responsibility on the cryptocurrency market being under-regulated. This is a clear case of deflection and finger-pointing.
It’s hard to know what’s legitimate in the anything-goes world of cryptocurrencies. U.S. regulators are accustomed to cracking down on such scandals when they plague the stock market. There may be similar enforcement in this litecoin case, but overall, watchdogs are only looking into how to regulate cryptocurrencies . There are no clear rules.
This is a lame attempt at passing things off as a product of a Wild West faction of the investment markets. You can try to lay the blame on the rebellious new arrivals, but there was something that is very well established and dependable — Wal-Mart. The press release, after all, was said to have derived from that company. They have spokesmen, PR divisions, and accessible people who can field questions like this at the ready. Especially if this had been a major announcement by the corporation, they would have been well-prepared to take calls on the news they allegedly had just released.
This was a major error in journalistic practices, and the result was an immediate impact on the markets. To see the effort to push responsibility onto others indicates the lack of introspection seen in the press corps these days. The only positive is that we do not see the lame move of applauding outlets for issuing a retraction. That tiresome practice is at least in this instance being shelved.