• BTC Dominance: %
XBT.Market
Advertisement
  • Home
  • Coins MarketCap
  • Crypto Exchanges
  • Crypto Calculator
  • Top Gainers and Loser
  • News
  • Contact Us
No Result
View All Result
XBT.Market
No Result
View All Result
Home Bitcoin

How to identify and avoid a crypto pump-and-dump scheme?

Jon Hartney by Jon Hartney
July 16, 2022
in Bitcoin, Blockchain, Business, Market
0
189
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter

Pump-and-dump in crypto is an orchestrated fraud that involves misleading investors into purchasing artificially inflated tokens — typically marketed and hyped by paying celebrities and social influencers.

Educating oneself about the crypto ecosystem is crucial for investors to pursue during a bear market while awaiting a bull cycle. That being said, having a good understanding of crypto investment entails keeping an eye out for fraudulent projects that threaten to drain assets overnight, a.k.a. pump-and-dump schemes.

Pump-and-dump in crypto is an orchestrated fraud that involves misleading investors into purchasing artificially inflated tokens — typically marketed and hyped by paying celebrities and social influencers. SafeMoon token is one of the most prominent examples of an alleged pump-and-dump scheme involving A-list celebrities, including Nick Carter, Soulja Boy, Lil Yachty and YouTubers Jake Paul and Ben Phillips.

Related articles

Bitcoin derivatives data shows room for BTC price to move higher this week

January 23, 2023

Bitcoin price consolidation opens the door for APE, MANA, AAVE and FIL to move higher

January 22, 2023

Once the investors have purchased tokens at inflated prices, the people owning the biggest pile of tokens sell out, resulting in an immediate crash in the token’s prices. While fraudsters disguise pump-and-dump schemes under the pretext of creating the next batch of crypto millionaires, knowledgable investors have the upper hand in identifying and avoiding their involvement.

Pump-and-dump schemes are usually accompanied by false promises around three broad categories — solving real-world use cases, guaranteed exorbitant returns and unwithered backing from celebrities and influencers.

The long-term success of a cryptocurrency is heavily dependent on the use cases it serves. As a result, people supporting pump-and-dump projects often suffice their involvement by highlighting the use cases the token aims to serve. In addition, such schemes typically rope in celebrities by upfront payments in cash and the project’s in-house tokens. 

Celebrities then market the fraudulent tokens to trusting fans, usually with promises of high investment returns. In the case of SafeMoon, celebrities were accused of a slow rug pull, implying a slow sell-off of holdings as the trading volume from retail investors remained inflated.

Binance, the biggest crypto exchange in terms of trading volume, also warned investors from taking investment advice from celebrities and influencers.

Superstars ≠ crypto experts.

Music artist @JBALVIN says “do your own research”.

On 2.13 when big names try to give you crypto advice — sound #CryptoCelebAlert and grab 1/2222 NFTs of basketball star @JimmyButler!

Learn more ⬇️https://t.co/3rC7r0uJ8M pic.twitter.com/Hml8AN2aEs

— Binance (@binance) February 7, 2022

In the next bull cycle, traditional and crypto investors across the globe will amp up efforts to recoup losses from the ongoing bear market. Knowing this information, fraudsters will try and find opportunities to dupe unwary investors by presenting unrealistic gains. As a result, do your own research (DYOR) stands as one of the best pieces of advice in crypto.

Related: Sygnia CEO criticizes Elon Musk for alleged Bitcoin pump and dump

Elon Musk was recently accused of manipulating crypto prices by prominent South African billionaire businesswoman Magda Wierzycka.

Wierzycka believes that Musk’s social media activity and its implications on the price of Bitcoin (BTC) should have made him the subject of an investigation by the U.S. Securities and Exchange Commission. She believes that Musk knowingly pumped up the price of Bitcoin via tweets, including those mentioning Tesla’s $1.5 billion BTC purchase, then “sold a big part of his exposure at the peak.”

Read Entire Article
Tags: CointelegraphCryptocurrencyInvestmentMining Bitcoin
Share76Tweet47

Related Posts

Bitcoin derivatives data shows room for BTC price to move higher this week

by Jon Hartney
January 23, 2023
0

BTC options data suggest that the Bitcoin price rally still has legs, even with wider economic concerns growing and the

Bitcoin price consolidation opens the door for APE, MANA, AAVE and FIL to move higher

by Jon Hartney
January 22, 2023
0

BTC could take a break from its sharp rally and if BTC price bounces off underlying support, APE, MANA, AAVE...

Genesis bankruptcy case scheduled for first hearing

by Jon Hartney
January 22, 2023
0

The first hearing in Genesis Capital's bankruptcy case will be held on January 23, according to court filings

Terra lending protocol Mars to launch mainnet

by Jon Hartney
January 22, 2023
0

The Mars Hub will launch an independent Cosmos application chain and issue MARS to users who hold the token during...

Central African Republic eyes legal framework for crypto adoption

by Jon Hartney
January 22, 2023
0

A 15-member committee is tasked with working on a legal framework that will allow cryptocurrencies to operate in

Load More
  • Trending
  • Comments
  • Latest

Ethereum Classic gets ‘endorsement’ from Vitalik Buterin, but ETC price still risks 50% crash

July 27, 2022

Critique on Helium’s $6.5K monthly revenue causes a stir

July 28, 2022

All aboard! Elon Musk’s Vegas Loop now taking Dogecoin payments

July 7, 2022

Cardano Vasil hard fork hit with another delay for several weeks

July 29, 2022

All aboard! Elon Musk’s Vegas Loop now taking Dogecoin payments

0

Crypto owners banned from working on US Government crypto policies

0

Korean startup Uprise lost $20M shorting LUNC

0

Ethereum testnet Merge mostly successful — ‘Hiccups will not delay the Merge.’

0

Bitcoin derivatives data shows room for BTC price to move higher this week

January 23, 2023

Bitcoin price consolidation opens the door for APE, MANA, AAVE and FIL to move higher

January 22, 2023

Genesis bankruptcy case scheduled for first hearing

January 22, 2023

Terra lending protocol Mars to launch mainnet

January 22, 2023

XBT.Market

This website is an automated news feed powered by the Nebulome cloud system. The site is made possible by YYC TECH Consulting and Alberta Digital Mining Company. As a team with major crypto and bitcoin enthusiasm, we have curated major sources of news, trading and financial data to bring you, our viewer, an unbiased source of truth.

Recent Posts

  • Bitcoin derivatives data shows room for BTC price to move higher this week January 23, 2023
  • Bitcoin price consolidation opens the door for APE, MANA, AAVE and FIL to move higher January 22, 2023
  • Genesis bankruptcy case scheduled for first hearing January 22, 2023
  • Terra lending protocol Mars to launch mainnet January 22, 2023
  • Central African Republic eyes legal framework for crypto adoption January 22, 2023

News Categories

  • Bitcoin
  • Blockchain
  • Business
  • Market

Tags

bitcoinMagzine Cointelegraph Cryptocurrency insidebitcoins Investment Mining Bitcoin NewsBTC

Quicklinks

  • Home
  • Coins MarketCap
  • Crypto Exchanges
  • Crypto Calculator
  • Top Gainers and Loser
  • News
  • Contact Us

© 2022 Xbt.Market - Powered by YYC Tech Consulting & ADMCO.

No Result
View All Result
  • Home
  • Coins MarketCap
  • Crypto Exchanges
  • Crypto Calculator
  • Top Gainers and Loser
  • News
  • Contact Us

© 2022 Xbt.Market by Nebulome.

  • bitcoinBitcoin(BTC)$22,934.00-1.80%
  • ethereumEthereum(ETH)$1,635.91-1.57%
  • USDEXUSDEX(USDEX)$1.07-0.53%
  • tetherTether(USDT)$1.000.11%
  • binancecoinBNB(BNB)$328.33-1.15%
  • usd-coinUSD Coin(USDC)$1.000.03%
  • rippleXRP(XRP)$0.398964-2.69%
  • Binance USDBinance USD(BUSD)$1.000.14%
  • cardanoCardano(ADA)$0.392652-1.53%
  • dogecoinDogecoin(DOGE)$0.092405-2.35%
  • OKBOKB(OKB)$44.491.44%
  • matic-networkPolygon(MATIC)$1.21-1.69%
  • SolanaSolana(SOL)$23.32-3.27%
  • Shiba InuShiba Inu(SHIB)$0.000015-1.40%
  • Lido Staked EtherLido Staked Ether(STETH)$1,629.03-1.77%
  • polkadotPolkadot(DOT)$6.72-1.38%
  • litecoinLitecoin(LTC)$96.93-0.75%
  • AvalancheAvalanche(AVAX)$20.09-3.51%
  • tronTRON(TRX)$0.063611-2.29%
  • UniswapUniswap(UNI)$6.84-4.08%
  • daiDai(DAI)$1.00-0.03%
  • cosmosCosmos Hub(ATOM)$14.38-1.21%
  • wrapped-bitcoinWrapped Bitcoin(WBTC)$22,832.00-2.16%
  • chainlinkChainlink(LINK)$6.99-2.70%
  • leo-tokenLEO Token(LEO)$3.624.42%
  • ToncoinToncoin(TON)$2.28-2.79%
  • ethereum-classicEthereum Classic(ETC)$22.82-2.12%
  • moneroMonero(XMR)$166.41-3.43%
  • bitcoin-cashBitcoin Cash(BCH)$133.42-2.91%
  • Aerarium FiAerarium Fi(AERA)$7.14-13.09%
  • AptosAptos(APT)$15.07-6.80%
  • stellarStellar(XLM)$0.090978-2.69%
  • ApeCoinApeCoin(APE)$5.75-1.33%
  • CronosCronos(CRO)$0.081147-3.54%
  • NEAR ProtocolNEAR Protocol(NEAR)$2.38-4.48%
  • QuantQuant(QNT)$138.69-1.98%
  • filecoinFilecoin(FIL)$5.28-3.67%
  • algorandAlgorand(ALGO)$0.258550-3.34%
  • HederaHedera(HBAR)$0.069454-3.92%
  • Lido DAOLido DAO(LDO)$2.151.08%
  • vechainVeChain(VET)$0.024027-2.94%
  • Internet ComputerInternet Computer(ICP)$5.58-4.33%
  • FantomFantom(FTM)$0.55-9.35%
  • decentralandDecentraland(MANA)$0.73-5.61%
  • The SandboxThe Sandbox(SAND)$0.73-4.42%
  • Axie InfinityAxie Infinity(AXS)$10.95-3.84%
  • AaveAave(AAVE)$86.30-1.60%
  • The GraphThe Graph(GRT)$0.13328512.81%
  • eosEOS(EOS)$1.08-3.48%
  • FlowFlow(FLOW)$1.12-2.91%
  • Terra Luna ClassicTerra Luna Classic(LUNC)$0.0001870.31%
  • MultiversXMultiversX(EGLD)$44.84-3.36%
  • theta-tokenTheta Network(THETA)$1.09-6.45%
  • tezosTezos(XTZ)$1.17-3.61%
  • FraxFrax(FRAX)$1.000.26%
  • true-usdTrueUSD(TUSD)$1.000.01%
  • paxos-standardPax Dollar(USDP)$1.000.51%
  • huobi-tokenHuobi(HT)$5.57-2.43%
  • bitcoin-cash-svBitcoin SV(BSV)$43.870.28%
  • kucoin-sharesKuCoin(KCS)$8.64-1.99%
  • Frax ShareFrax Share(FXS)$10.958.24%
  • havvenSynthetix Network(SNX)$2.54-7.30%
  • Curve DAOCurve DAO(CRV)$1.070.01%
  • Rocket PoolRocket Pool(RPL)$39.66-0.77%
  • ChilizChiliz(CHZ)$0.140106-3.50%
  • PancakeSwapPancakeSwap(CAKE)$4.49-1.13%
  • USDDUSDD(USDD)$0.99-0.06%
  • eCasheCash(XEC)$0.000037-2.92%
  • ImmutableXImmutableX(IMX)$0.900.45%
  • BitTorrentBitTorrent(BTT)$0.000001-3.18%
  • dashDash(DASH)$62.363.00%
  • iotaIOTA(MIOTA)$0.245130-2.05%
  • Trust WalletTrust Wallet(TWT)$1.60-3.41%
  • BitDAOBitDAO(BIT)$0.57-1.56%
  • Mina ProtocolMina Protocol(MINA)$0.78-6.34%
  • KlaytnKlaytn(KLAY)$0.206163-3.27%
  • OptimismOptimism(OP)$2.953.23%
  • GateGate(GT)$4.31-4.52%
  • makerMaker(MKR)$692.05-2.47%
  • neoNEO(NEO)$8.74-3.06%
  • cUSDCcUSDC(CUSDC)$0.0226920.92%
  • ArweaveArweave(AR)$11.43-3.30%
  • gemini-dollarGemini Dollar(GUSD)$1.000.58%
  • GMXGMX(GMX)$67.31-0.56%
  • OKCOKC(OKT)$31.78-1.88%
  • zcashZcash(ZEC)$43.87-3.88%
  • cDAIcDAI(CDAI)$0.022186-0.01%
  • RenderRender(RNDR)$1.841.08%
  • RadixRadix(XRD)$0.053799-8.25%
  • THORChainTHORChain(RUNE)$1.81-1.87%
  • Tokenize XchangeTokenize Xchange(TKX)$6.67-1.99%
  • OsmosisOsmosis(OSMO)$1.01-2.80%
  • WhiteBIT TokenWhiteBIT Token(WBT)$4.10-0.39%
  • singularitynetSingularityNET(AGIX)$0.435671-1.30%
  • PAX GoldPAX Gold(PAXG)$1,873.370.55%
  • enjincoinEnjin Coin(ENJ)$0.471682-2.44%
  • loopringLoopring(LRC)$0.372211-5.36%
  • Convex FinanceConvex Finance(CVX)$6.23-3.93%
  • cETHcETH(CETH)$32.84-1.69%
  • Tether GoldTether Gold(XAUT)$1,869.630.08%