About a month ago, I shared a post here on Hive in the Leofinance community with the title, Identifying Crypto Scams & Their Red Flags and I stated five scams with their different red flags to look out for. One of the scams I mentioned is one called "Pump & Dump".
I have also shared a more detailed post about identifying Crypto - romance scam with a lot of signs to look out for when you suspect a romance scam. You can check out the two contents as they are of good information for us to be wary of various scams going around since crypto adoption.
For this content, I'll be focusing on the scam "Pump & Dump", sharing signs you could find if you're being invoked in an ongoing pump & dump scam. I bet a lot of people both new and old crypto enthusiasts has fallen for this scam in one way or the other, losing little or so much in the process.
What is a "Pump & Dump" Scam?
Pump & Dump is a form of fraud where the originators of the scheme plan to take money from innocent investors by encouraging them to buy an asset based on false information.
To be more simpler in meaning and focusing the definition to crypto enthusiasts, pump and dump means:
A situation where some scammers come together to hike the price of a token to win over or convince investors to buy in the tokens and then they sell their own share of the token leaving the investors stranded with their investments. They are good at increasing the price by buying in high prices but sell off when there are more investors.
With how there are countless numbers of crypto coins in the market, investors are out finding which to invest in for profits regardless of possible losses. This is why scammers find ways to boost a coin for them to see and they succeed in scamming people with it.
A personal experience
Way too many times that I doubt I'll be able to stop falling for them. This is because out of the many, a few work out fine and I get profits from them. Regardless, one I remember very well and it's most recent was the time of "SafeMARS, safeBTC, safeSTAR, moonDAO and moon chain". I was convinced to buy a huge figures of these tokens when the hype got too much and a lot of my friends in crypto were buying.
Well, the long story cut short was that they all ended up in my wallet as a dump with no profit gained, just another loss. I bet those who started the hype got their money back and even more from it. That experience taught me better and now I try to identify any signs to know it is another pump & dump scam.
How to identify a "Pump & Dump" scam?
For this particular kind of scam, there are two very obvious or telltale signs that one is in a "pump & dump" scam. Considering how I fall for these signs repeatedly is still a baffle for me but I can only do the favour of sharing them here with others and keep trying not to fall for them while making profits and exploring the world of crypto investments. Here are the two telltale signs it may be a pump & dump scam:
*Copy-and-pasted messages to hype on social media: You see messages, write ups, tweets and a lot of similar info about a token in your social handles like telegram, discord and on X. The hype can be really good but a lot of them are too good to be true but that is why many fall for it because they are convinced that something good will come out of it anyways. The scammers tend to put in the "Hurry up" to invest before you lose out the opportunity. As I was advised and I'll share. It is at this time you wait, do not hurry into making investments.
Sudden Price Spikes: When they have some investors but want more of them, they hike the price of their token causing more people to believe in the token and get greedy to invest more for bigger gains. When they have enough, they sell off very slowly so the price doesn't get affected too obviously until they get too much profits. Innocent investors will be left with a token worth nothing compared to what they used in investing.
There are other regular signs like in other crypto scams but I'll stop here hoping that this was as helpful as it was made to be. Do let me know what you have to contribute regarding this crypto scam and maybe share your experience.
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