The price of bitcoin cash rose 3.6% in less than an hour Friday morning, following the posting of a fraudulent news release saying on food retailer Kroger Co.’s KR, -1.54% website and PR Newswire.
The price of bitcoin cash BCHUSD, +0.63% rose from $601.28 at 6:54 a.m. Eastern Time to a high of $623.22 at 7:44 a.m, according to Coinmarketcap.com. The price then quickly fell and is trading roughly flat Friday morning.
Bitcoin cash is an offshoot of bitcoin BTCUSD, +0.04% that was created in 2017 after a dispute in the community over proposed improvement plans for the bitcoin network. It has a market capitalization of about $11 billion versus more than $1.1 trillion for bitcoin.
Many observers of the markets for digital assets have worried that they are ripe for manipulation. Neither the U.S. Securities and Exchange Commission nor the Commodity Futures Trading Commission practice direct oversight of spot markets for digital assets that are not considered securities under federal law. It may be that whoever perpetrated the fraud could have profited off the Friday morning price spike in relatively thinly traded bitcoin cash.
“Without centralized cryptocurrency regulation in the US, market manipulation in cryptocurrency spot markets and derivatives exchanges will continue to undermine market integrity and investor confidence.,” wrote Santiga Gazi of Duke University School of Law’s Global Financial Markets Center, in an October paper for the Cambridge Law Review.
The episode echoes an incident in September, when a fake press release stating that Walmart Inc. launched a partnership with Litecoin was issued by GlobalNewswire.