Verge Hoax Causes Cryptocurrency Investors to Lose Millions
A tweet by @6BillionPeople, a user with 4.63 million followers interested in his cryptocurrency predictions and advice, sent the Verge cryptocurrency market into chaos on Christmas Day. In the tweet, shown below, @6BillionPeople urges his followers to quickly sell their Verge cryptocurrency, due to alleged internal problems within the Verge development team. This tweet was liked and retweeted numerous times, causing it to spread rapidly.
The value of Verge quickly tanked in response to this tweet as investors dumped their coins, trying to get any value out of them while they still could. The value of Verge on Binance dropped from a previous high of 2000 Satoshis (~0.27USD) to a low of 622 Satoshis (~0.09USD) in a matter of minutes – a 69% reduction.
177 million Verge coins were sold in the hour following the initial tweet on the Binance exchange alone – 8x more than the usual hourly volume. This increased trading volume was sustained for at least 2 more hours, as seen on the Binance chart below. At a loss of 18 cents per coin sold, more than 32 million dollars were scammed from Verge investors in just one hour, on just one exchange.
This hoax didn’t just affect uninformed investors, but also people who intended to hold for the long term. Many users make use of the stop-loss functionality on exchanges just in case things legitimately go south. The purpose of a stop-loss is to sell assets once the price hits a predetermined minimum. In this case, since the value was dropped by fake news, many users had their stop-loss activate and dump all of their Verge coins for nothing – causing them to lose millions while eating Christmas lunch.
@6BillionPeople later stated that he did not post the initial tweet and that he was hacked, before deleting everything. Funnily enough, his Patreon must also have been hacked at the same time, as the message was also posted there. This is just one of many reasons why you should not trust random Twitter users to give you financial advice. It’s also a good example of why everyone should use two-factor authentication!
This ordeal demonstrates the tactics that market manipulators use to spread fear, uncertainty, and doubt in the community. By starting rumours and spreading fake news, these people can cause rapid market changes, allowing them to load up on cheap cryptocurrencies. Strangely enough, a new Verge wallet was created the same day that the tweet was posted which quickly gained Verge coins until it was the number 1 largest balance of Verge in a single wallet. This wallet now contains more than 14% of all existing Verge coins – a total worth of over $553 million US at the $0.27 Verge high point.
The Verge team themselves even posted a tweet later on confirming that there were no problems internally, and that the project was about to be better than ever with the addition of the Wraith update.
Even hours after the tweet was revealed to be a hoax, the value of Verge is still feeling the effects. The traded price on Binance almost 12 hours after the initial tweet is only 1000 Satoshis – half of its original value. If there’s anything positive at all about this situation, it’s that now is a great time for new or hesitant investors to jump on board. The low price we’re seeing right now will not last. The Verge development team has announced that the Wraith upgrade will be released before 2018; the hype surrounding Wraith will cause the price of Verge to soar. If you are new to Verge, or cryptocurrencies in general, you can follow this guide to invest now.