A Seattle-based startup recently published a press release claiming that it had partnered with the Central Bank of Brazil on a digital real trial. However, the bank has come out to refute these claims and deny any links with the startup.
Kaj Labs said it had initiated discussions with the bank to partner on a digital real rollout, noting that Brazil was looking to launch its central bank digital currency (CBDC) by 2022 if it was able to meet all the infrastructure needs in time. It also claimed that the bank was counting on PIX, a local instant payment system it launched in 2020, as the backbone for the CBDC rollout.
Kaj Labs further stated that the bank would utilize the startup’s cross-chain decentralized application known as Lithosphere to launch its digital currency. It even quoted the bank’s president Roberto Campos Neto who purportedly called for an efficient, instant, and interoperable payment system anchored on a digital real.
However, the bank has debunked the Kaj Labs’s announcement, stating that the press release was misleading and the links were fake. Speaking to several outlets, the bank denied ever getting into any partnership or having any talks with the Seattle startup.
Kaj Labs’ website is vague about its platform, technology, leadership, or products. It doesn’t even have contact details, and although the press release mentioned it is based in Seattle, the phone number issued is from California.
The firm has published other press releases in the past with the same platform. Most are focused on its supposed philanthropic efforts, including its $50 million donation to the Black Lives Matter movement and $270 million donation to “El Salvador and other nations adopting Bitcoin as legal tender.”
It has also purportedly donated $105 million to Ripple’s legal defense against the Securities and Exchange Commission (SEC). It even credits Ripple for paving the way so that other companies like Kaj Labs could get into the market.
The Kaj Labs fiasco is not new in the digital currency industry. Scammers have taken to publishing fake information via press releases to pump their tokens or attract attention to their projects. Even major projects have been linked to such practices.
In September, a press release on Globe Newswire claimed Walmart had partnered with the Litecoin Foundation and would accept LTC in its stores. This pushed the value of the token through the roof. What’s worse, the Charlie Lee-led Litecoin Foundation tweeted the news, but later took the tweet down. As it turned out, the news was fake, and Walmart denied any links.
Lee would later blame the snafu on a junior social media team member who was “a little too eager and shared the story.” He told Bloomberg, “We try our best to not tweet fake news and this time we really screwed up.”
The latest incident involves American grocery giant Kroger and Roger Ver’s BCH. A spokesperson for the company told news outlets a week ago that a press release had popped up on its company website claiming that the retailer would start accepting the digital currency from December. The news was also fake.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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