Waltonchain, a Chinese blockchain and Internet of Things (IoT) startup, saw its market cap shrink by $100 million because of an accidental tweet from an employee who apparently forgot to switch to his personal account.
Waltonchain’s token, Walton Coin (WTC), was in free fall on February 28 for over 24 hours, the reason for this sharp descent being a tweet. It triggered concerns among investors that the China-based blockchain startup may be using fraudulent tactics. The tweet temporarily depressed the company’s value by $100 million.
Waltonchain ran a promotion on Valentine’s Day (February 14), announcing that its users could snag part of the 565 WTC reward if they followed the company on social media.
It said in a blog post:
“214 qualifying participants will be selected randomly by application to receive 2.14 WTC. Furthermore, 5 lucky winners will be selected from these 214 winners to receive extra 21.4 WTC.”
On February 28, the company posted the nicknames of the 200 winners in a tweet.
Obviously, this type of information cannot be verified by users for authenticity since no one knows who is behind those nicknames. However, an imprudent tweet that praised Waltonchain for its generosity put investors on alert. The problem is that the message came from a Waltonchain employee, who probably forgot to switch to his personal Twitter account. He soon deleted the comment, but it was too late – the Redditors made sure to take screenshots.
His post went viral, and Waltonchain investors began questioning the fairness of its campaign, which was quickly followed by en-masse sale of WTC. The token, which ranked at number 40 on Coinmarketcap, plunged from $22.41 on February 28 to $17.36 on March 1.
Having lost $100 million from its market cap, Waltonchain sprang into action and offered an official apology, adding that the employee was removed from the winners’ list.
The post also contained an Instagram video where the company explained that the selection procedure was objective.
The tweet went on:
“Το еxtеnd our apοlοgу, wе would givе awaу 4000 ΕΤН fοr frее. Juѕt ѕеnd 0.4-5.0 ΕΤН, and gеt 4-50 ΕΤН ᖯaсk tο уour addrеѕѕ.”
It seems that the initiative is working as the WTC quotation is bouncing back.
However, many Waltonchain investors have started to question its legitimacy as a blockchain company.
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