Magazine article American Banker

Death Hoax Involving Ethereum Creator Sparks Panic Cryptocurrency Sell-Off

Magazine article American Banker

Death Hoax Involving Ethereum Creator Sparks Panic Cryptocurrency Sell-Off

Article excerpt

Byline: Brian Patrick Eha

The beginning of the week brought another reminder that cryptocurrencies may be vulnerable to market manipulation--and may not be ready for prime time..

False rumors of the death of Vitalik Buterin, the co-founder and public face of Ethereum, spread through social media on Sunday night, sparking a panic sell-off of Ether, the network's digital token. In short order, $4 billion had been erased from the market capitalization of the world's second-biggest cryptocurrency.

The hoax originated on the online image board 4chan, long famous as a haven for trolls and pranksters. It capped off a week that had seen the price of Ether tank once already, plummeting almost instantly to $0.10 on a major exchange in a so-called "flash crash," before rebounding above $300.

To vanquish the hoax and stop the bleeding, Buterin himself took to Twitter on Sunday night to provide proof of life.

That appeared at first to have stopped the bleeding. But the price began falling again on heavy trading through Monday morning, and by late afternoon the cryptocurrency's market cap was $22.5 billion, down from a high two weeks earlier of more than $37 billion.

Banks have been showing signs of enthusiasm for digital currencies and the public, open-source blockchain networks they run on in recent weeks.

In May, the Ethereum Enterprise Alliance--a collective aiming to use the network's technology to build applications for Fortune 500 companies--added 86 new members to its ranks, including State Street, Rabobank and Toyota. …

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