As the last bull market reached its peak, many crypto investors unknowingly fell victim to pump-and-dump schemes orchestrated through online groups, particularly on platforms like Telegram. In these schemes, investors noticed sudden and dramatic price movements in obscure altcoins, with prices skyrocketing by over 400% in minutes, only to crash just hours later. The lack of any significant news or updates on these projects often raised suspicions of market manipulation.
Upon investigation, many discovered the unsettling truth behind these fraudulent practices. These groups provided their members with insider information, including which coin would be targeted, the timing, and the exchange where the manipulation would take place. On the scheduled day, the group artificially inflated the price by making large purchases, triggering a wave of FOMO (fear of missing out) among unsuspecting investors. As soon as the price surged, the orchestrators quickly sold off their holdings, leaving everyone else with significant losses.
To combat this, some crypto exchanges, like Binance, have taken steps to suspend withdrawals during erratic price movements, as they did with DREP in 2021, potentially saving countless investors from financial loss.
Itâs crucial for crypto investors to remain cautious and well-informed. Understanding how pump-and-dump schemes operate and recognizing early warning signs can help investors make more educated decisions and avoid falling prey to these manipulative tactics. In the volatile world of crypto, staying vigilant and doing thorough research is key to investing wisely and safely.
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