Crypto Pump-and-Dump Turnover Reaches $825M in H1 2018 - Report
Cryptocurrency pump-and-dump schemes generated a turnover of $825 million in the first six months of 2018, according to an investigation by the Wall Street Journal.
Cryptocurrency pump-and-dump groups have generated transactions worth more than $825 million in the first six months of 2018, according to a Wall Street Journal investigation, which managed to identify 175 such schemes, featuring 121 different altcoins. The revelations are hardly shocking to crypto traders.
What are pump-and-dump groups?
In case you want to get a closer look without going through the hassle of setting-up various accounts, be sure to check our own investigation on pump-and-dump groups. In it we visit three specific chatrooms and provide detailed analysis on the events which occurred.
New revelations?
The WSJ report unveils information which is generally known by crypto enthusiasts, but revealing it to the mainstream could keep inexperienced traders from falling into such traps.
Some of the highlights include:
- Low Market Cap Targeting: Groups target mostly coins with low market capitalization, so the manipulation can be performed effectively.
- Subscription Fees: Some of the chatrooms require monthly subscription fees, allegedly ranging from $50 to $250, but the most popular ones are free.
- Lack of Prevention: While exchanges are aware of this behavior, they take no action for preventing it. Even the teams behind relatively unpopular altcoins know their token is used in this fashion, but can’t do much about it.
Pump-and-dump schemes are not always profitable. Similar practices are illegal in regulated financial markets (and obviously unethical), but also hard to participate in. The price action often occurs so quickly within a few seconds, and might cause substantial losses.
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