Pump and Dump Schemes

A pump and dump scheme refers to a coordinated effort by a group to artificially inflate the price of a cryptocurrency through collective buying. Once the price reaches its peak, they quickly sell off their holdings, leaving regular investors with significant losses.

These cryptocurrency scams are highly unethical and expose exchanges to potential legal complications related to market manipulation. Consequently, when a specific coin is identified as an active pump and dump vehicle, exchanges typically take swift action to delist it.

Telegram groups and Discord servers often serve as platforms for orchestrating these deceptive schemes. Crypto exchanges can monitor these channels to gather evidence of coordinated pumps and identify coins to avoid.

Signs of a pump and dump scheme include sudden and significant price and volume spikes without any logical explanation. Furthermore, if a coin's activity is primarily concentrated within a small group of wallets, it raises suspicions.

While some unscrupulous exchanges may hesitate to delist these fraudulent coins due to the trading fees generated by such activities, legitimate and trustworthy cryptocurrency exchanges act promptly to remove manipulative assets from their platforms.