CRYPTOCURRENCY trading is almost inevitable for a newbie and cryptocurrencies enthusiastic to took away from , as its the most promising part of the cryptocurrencies and Blockchain space . It's an area normally believed by less informed and greedy investors , to get rich really fast , thereby forgetting other Blockchain activities (Like , HIVE blogging) . 90% of these category of people end up blowing away their first trades , while 10% could be successful at first trades but will eventually lost , which I was a victim.
Since my exposure to the crypto world trading has been the only activities I was happily , actively partaking in , I thought I was investing not until the pump and dump ordeal woke me up from my illusions. I had my account liquidated in matter of second. It was a bitter-sweet experience, although I learned it the hard way but glad it was early when I could easily start over and make things right . So I went ahead and researched about this BIG_PUMB_SIGNAL telegram group to find out if it was legal or I was the only in this problem
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A pump is a coordinated , intentional short term increase in the demand of a market instrument ( It doesn't happen only in crypto) which leads to a price hike . It could be conducted by an individual or more likely , organized groups , typically who use encrypted chat application to coordinate pump and dump events. The admins or better still the organizers are the ultimate beneficiaries. While the pump participants, standard or less informed investors are the traders who collectively buy a certain coin immediately after receiving the instrument from the pump organizers on which coin to buy causing the price of the coin to be "PUMPED . Many end up buying coins atban inflated price and are the ultimate victim of the pump and dump scheme . The exchange use are selected by the organizers. Some exchanges sometimes are directly associated with pump and dump scheme.
Process
The organizers create a publicly accessible group members or channel and recruits as many group members or channel subscribers. Communication was done through the radio , tabloids and word of mouth. Nowadays pump and dump are more vital than ever . Communication is done through the internet and the web . Due to the end to end encryption, programmability, relative anonymity , new social media tools such as telegram and discord have become cryptocurrencies enthusiastic preferred communication vehicles.
Pre-pump announcement:the group is ready to pump once it obtains enough members. The admins announces details of the next payment pump a few days ahead
PUMP:At the pre-arranged pump time the admin announces the coin typically in the format of an OCR ( optical character recognition) -proof image to hinder machine reading . Immediately afterwards, the admin urges members to buy and hold the coin and n order to inflate the coin price
DUMP: A few minutes after the pump starts , the coin price reach it peak . As soon as the first fall in price appears, pump and dump participant start to panic sale . And then post pump review , the admin post a review on coin price ice change
Is it legal
There are a variety of laws that make pump and dump illegal including:
Section 17(A) of the Securities Act of 1933:
The Securities Act prohibits anyone involved in selling or offering securities to participate in a scheme to defraud. Section 17(A) specifically criminalizes making material misstatements, omitting material facts, or otherwise participating in a scheme to defraud potential purchasers of securities.
Rule 10b-5 of the Securities Exchange Act of 1934: The Securities Exchange Act broadly prohibits any fraud, material misstatements, or material omissions in connection with the purchase or sale of securities.
18 U.S. Code Section 1343: This wire fraud statute criminalizes any fraud scheme that uses wire, radio, or television communications. If the Internet is used as part of a pump and dump scheme or if faxes are sent out to pump a stock, you can be charged with this offense.
18 U.S. Code Section 1341: This statute broadly prohibits fraud and swindles, including fraud schemes using the postal service. If false reports about the company or other marketing materials were sent via mail, you may be charged with postal fraud.
Source https://nyccriminallawyer.com/fraud-charge/securities-fraud/pump-and-dump-schemes/
But some of them are not within the Us jurisdiction
**Can it be stop **
My opinion it can't really be, b IIIut can only reduced by creating awareness
Thanks for stopping by . I am open for new and different ideas still learning.