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Every few days, , strangers come together online to buy little-known cryptocurrencies, also known as altcoins, at exactly 2 p. Then, anywhere from 30 to seconds later, they sell them en masse or at least try to.
Those who buy and sell at the right time can potentially make out like bandits. This will pump the price straight up. After this the dumping part comes in. After the price rises tremendously up because of the pumping, we start selling at a good profit.
This is called dumping. The pump group ethos is simple: Buy low, sell high. The implication is that investors outside the pump group will see the rapidly rising price and rush to buy in, anxious not to miss the next Bitcoin-style gold rush. But the reality is a bit more complex.
These groups are promoted heavily on Facebook, Instagram, and Twitter as both ads and general posts, but they almost exclusively operate on semi-anonymous messaging services like Discord and Telegram. The whole scam works like this: First, an organizer grows their group to an acceptable size 2, seems to be the minimum, based on member-hungry Discord and Telegram posts through promotion and by spamming join links. Next, they will find an unheard-of coin and direct everyone to buy it, driving the price up.
Commonly called altcoins or less politely, shitcoins , these alternative cryptocurrencies are easy to make and generally worthless. I spent a day lurking in 12 of these groups ranging from large Big Pump Signal, K to small Cali Pumps, 2K and chatting with their members.
In most established groups, the pumping process itself is surprisingly well-organized. After the pump signal is given, group members flood the chosen exchange, buying up as much of the coin as they can for cheap. Members are also expected to promote the coin on social media in order to create buzz around it, which is intended to attract new investors to the currency.
As BuzzFeed reported, members of these groups sometimes even create fake celebrity tweets or fabricate news stories in order to affect the price of a coin. Almost immediately afterwards, it began to rise in value. Anyone who invested immediately and dumped right at the peak could have potentially earned a I could just do it again. You just keep losing money until you don't have any left, and the organizer makes out like a bandit, because not only is he profiting off buying it before anyone else, but he's charging people for the group.
Tiered access to the pump signal a. High-ranking members may be sent the pump signal anywhere from half-a-second to three seconds earlier than the general pool, a disparity the groups advertise openly. Like most involved in the scam, Spann first heard about the groups through Twitter, but quickly became hooked. While a couple of seconds might not seem like much of an advantage to an outsider, in the fast-paced world of pump and dump, it makes all the difference.
The general consensus within the groups themselves is that this is due to bots, which are allegedly used by members to buy and sell large amounts of coin almost instantly. The fact that it is so easy to lose money may just be due to the structure of the scam, however, in which elite members are the only ones positioned to profit. In the end th[e] admins of these groups will always want more people in their groups — so they can make more gains on bigger pumps — because they always buy in first because they know the coin they will pump.
A lot of people lost money. Though the technology for these sort of schemes has been around for years, pump and dump groups seem to have recently skyrocketed in popularity. The popular pump groups I found on Discord and Telegram were created within the last two months, and mentions of pump groups on Twitter and elsewhere from November and earlier pale in comparison to recent stats.
The same goes for mentions of pump-group-related ads on Facebook and Twitter. Screenshot of a Facebook ad for pump group Altcoin Global. And if there's not, then the price drops like crazy and you lose. Welcome to Big Pump Signal! We are a group that buys cryptocoins all at the same time to increase its value. We then sell for the increased price for huge profits!
Welcome message for Big Pump Signal. Paris Martineau Jan—23—