What You Need to Know About Cryptocurrency Pump-and-Dump Schemes
Cryptocurrency exchanges provide new and additional markets and methods to facilitate pump-and-dump schemes. Scammers utilize both traditional and novel implementation programs.
January 07, 2022 at 10:00 AM
6 minute read
Financial Services and BankingCryptocurrency pump-and-dump schemes (CPDs) are becoming increasingly prevalent. As in the case of traditional "pump and dump" schemes, CPDs lead to short-term trading perturbations—exaggerated increases and/or decreases in prices, volume, or volatility. Prices peak or bottom out within a short time span and are usually accompanied by quick reversals, resulting in a manipulated inflation or deflation of an asset's price, usually accomplished via misleading recommendations. Since the inception of cryptocurrency as a widely traded asset, there has been increasing opportunity to make money through market manipulation, specifically through classic pump-and-dump and related fraudulent schemes, and more specifically CPDs.
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