Pump-and-Dump schemes launched for unethical and fraudulent activities; this is the point of focus of today where most scammers have seen to use this to steal assets. They appear for some duration, spread misleading information, earn your trust, collect your assets, and then suddenly disappear.
Our today’s article is going to guide you on how to spot the crypto pump and dump schemes.
In the world of crypto where investors invest and then earn revenue, there are two approaches to trigger investment one is legal and the other one is illegal. Pump and dump is kind of illegal, here scammers spread misleading information and make you invest more to earn profit in less time, moreover, they grab innocent investors with less knowledge of the investment and then suddenly disappear with the victim’s money.
This is often quite the easiest and safest way for criminals because they perform all the tasks anonymously. One of the best instances of this occurred with the $SQUID Game coin, which bears the name of one of the best Netflix series, Squid Game, last year. Even though the coin didn't relate to the show, it nevertheless generated a lot of buzzes.
From Where It is Originated
Scammers use different social media platforms like Facebook, Twitter, and Instagram. Moreover, they use different tricks and tactics to take the attention of investors. They generate curiosity and hype around the new coin. In that way, they can grab the attention of more investors and generate more revenue in a very short time.
Generally, most of them promise tremendous growth in a very short time period. Moreover, they generate fake influencers and make them generate fake reviews to attract investors to their services.
How to Identify Crypto Pump-and-Dump Schemes
From past experiences with the Pump and Dump schemes, they all almost go around the same loop. Following practices, they repeat all the time:
- New crypto launched and then suddenly hyped up, they grab more attention and influence in a very short time.
- Advertise through celebrities or influencers.
- They float continuous same-format messages in the comment sections, on Discord, or other social media platforms.
- Do aggressive advertisement campaigns.
- A sudden price hike on the chart.
Pump-and-Dump schemes are used by scammers to attract investors and their purpose is to appear for a short duration, mislead the information, earn your trust, collect your assets, and then suddenly disappear. They almost come with the same tricks and tactics like sudden hype, sudden price hike, more advertisement in a very short time, fake comments, and copy-pasted messages.