The Pump & Dump seize the cryptocurrency market

The cryptocurrency market is starting to plague Pumps & Dumps, illegal, of course in traditional markets, it is just a fraud method in which the most ignorant and unaware investors fall into these networks. The Telegram messaging network is being used to orchestrate these massive scams. Its strategy is simply to suddenly inflate the price of a cryptocurrency by coordinating certain buyers to act at specific times.

According to a report by Business Insider, the Telegram application has become an ideal place to carry out this type of scam, partly because it is heavily encrypted and allows users to keep their identities secret. It is usual to invite “traders” through links on Facebook and other social networks to these channels with the promise of earning large amounts of money, but they are only being used to increase the income of a few.

This works in a way that inflates the price of a particular cryptocurrency (Pump), and external traders begin to buy blinded by so much green candle, in this way the thrusters of such pump sell at high prices (Dump) leaving the large candles red for those external buyers. The Pump depends on the promotion that is made on such channel, the more ignorant and seized people, obviously better, this Scam of Pump & Dump is planned in advance, date, time and planned everything to the millimeter. The chosen cryptocurrency, however, is revealed only moments before the execution of the scam, so everyone has a good chance to buy.

Ben Yates, an associate of the RPC law firm who has studied this event closely, said:

It is clear, even with a casual monitoring of the exchanges, that this type of activity is common, particularly with cryptocurrencies of less circulation ”

This is obvious because it is more expensive to create Pump & Dumps in the traditional market (leaving aside that is illegal), or in BTC, than in cryptocurrencies with low capitalization, since with “little” capital injection in it you can get much greater movements. The exchanges should be regulated in the same way that traditional markets are regulated. The US Securities and Exchange Commission has said that cryptocurrencies will likely fall under existing securities laws, but so far has taken little corrective action with the scope.

The estafores create groups on Facebook that later move to Telegram in a more “private” is where the scam occurs, and not only the Pump & Dump scam occurs, many of these scammers publish the profits they have with their fraud methods as if a “signal” from their group had made such a profit, they put a price (and not a cheap one) on those groups of Pump & Dumps who take refuge behind the name of “Signs” and take advantage of the most needy or the most ignorant, by cheating them directly by putting a price on them to enter such a group and indirectly with the Pump & Dump that they create.

The cryptocurrency trading is the wild west right now, you have to be very careful and try to ignore those “wolves of Wall Street” shoddy.