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 have never heard of pump-and-dump groups, the concept is very simple. Traders create chatrooms in messaging apps, like Telegram or Discord, where information is shared. All rooms have an existing hierarchy, with the owners deciding which coin to buy into and at which exchange. Group members then act at a specified time, causing a relatively small rally, known as the “pre-pump”. Senior “officials” then use vario...
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