Beware! Pump and Dumps Persist in the Market
Market manipulation is still flourishing in the crypto world. The Wall Street Journal said it had identified 105 groups on chatting apps Telegram and Discord offering “trading signals, a type of service that is often associated with pump and dumps.
In total, the WSJ said that between January and the end of July it identified 175 pump and dump schemes involving 121 different digital coins, which show a sudden rise in price and an equally sudden fall minutes later. The report mentions coins such as version, cloakcoin, granitecoin, pesetacoin, stealth, and agrello.
Among the pump and dump groups examined by the newspaper, the biggest group identified as Big Pump Signal had more than 74,000 members in its Telegram channel. Since December, the group has reportedly initiated 26 pumps, totaling around USD 222 million in trading activity.
For example, on July 1, after followers of Big Pump Signal were commanded to start buying a token called cloakcoin, the price jumped 50% to USD 5.77 on Binance, a major exchange, before dropping almost a dollar after two minutes, according to the report. In total, 6,700 trades worth USD 1.7 million were executed compared with virtually no trading the hour before, it added, saying that one user claimed he made USD 1,400 on this pump without going big.