BREAKING: The FBI has just broken up a large-scale cryptocurrency fraud scheme, indicting 4 companies and 14 individuals on charges of market manipulation through the Pump and Dump method. This case has shaken the crypto community, especially because of the participation of prominent names such as Gotbit, ZM Quant, CLS Global, and MyTrade.
Pump and Dump â Classic Trick, But Always Effective
Pump and dump is one of the classic scams that is still hot today. Scammers will manipulate the value of tokens with fake transactions (wash trades) to create the illusion of strong growth. When the price is pushed up, they dump the tokens, and late buyers will suffer huge losses when the price suddenly plummets.
Joshua Levy, US Attorney, bluntly said: "If you make false statements to deceive investors, it's fraud. Period." It couldn't be more concise and succinct! This investigation has clearly exposed the dangers of fraudulent schemes in the crypto market.
FBI's Creative Tactic: Setting Traps With Fake Tokens
In an unprecedented move, the FBI created a fake cryptocurrency company called NextFundAI, with a fake token on the Ethereum network. This tactic fooled companies like ZM Quant, CLS Global, and MyTrade into agreeing to manipulate the value of the token. Little did they know, they were walking into an FBI trap.
âCreating fake tokens and companies is an unprecedented tactic to catch scammers in the crypto market,â said Jodi Cohen, FBI special agent in Boston. Who would have thought the FBI would pose as a professional crypto company?
SEC Issues Warning
The SEC has also been quick to jump in. Sanjay Wadhwa, deputy director of the enforcement division, reminded retail investors to be more vigilant than ever. The cryptocurrency market, especially small-cap altcoins, is a breeding ground for scams.
Advice For Investors: Stay Alert Is Survival!
Investing in cryptocurrencies always comes with risks, and small altcoins are a "delicious bait" for scammers. Experts recommend: allocate 70-90% of the investment portfolio to large, reliable assets such as Bitcoin, Ethereum. The remaining 10-30% can be invested in high-risk projects, but must be extremely careful.
Always be alert and cautious when entering the crypto market. High profits may be attractive, but behind it are not small pitfalls.
