Pump and Dump Schemes in Crypto Trading

Pump-and-dump schemes are a form of market manipulation commonly seen in cryptocurrency trading. In these schemes, orchestrators artificially inflate the price of a digital asset ("pump") by spreading false or misleading information. Once the price surges and attracts unsuspecting investors, the orchestrators sell off their holdings at the inflated price, causing a sharp decline in value ("dump").

Such schemes exploit the lack of regulation in the crypto market and prey on the greed of investors seeking quick profits. To avoid falling victim, traders should conduct thorough research, avoid relying on hype, and be cautious of sudden price spikes in low-liquidity assets.

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