As reported by Business Insider, Telegram is being used by cryptocurrency scammers to coordinate pump-and-dump arrangements. Telegram is an instant messaging service and by using it, scammers are able to create exclusive groups. With these groups they share information and organize attacks to make a profit off the uninformed traders. The same principle applies to stocks and equities markets, but the strict regulations imposed on those markets make this sort of price manipulation illegal. This is surely not the case with the unregulated crypto world, at least for the moment.
Telegram appears to be the main venue where the pump and dump schemes are being used. A number of channels within Telegram are designed specifically for just this sort of market manipulation, like PumpKing Community, Crypto4Pumps and We Pump. These communities provide a venue for scammers to attract participants who then help to move the price. These channels offer information on specific coin pumps to those who subscribe and then encourage subscribers to buy in quickly. After the people buy and the price increase, members reach out in other social media, encouraging further buying from unsuspecting victims. As the price continues to rise (pump), the scammers begin to sell (dump), causing panic selling and collapsing the price.
The victims are left with a coin value which is much smaller than before the scam. The entire process is a scam from start to finish. With the SEC and other international regulating bodies coming on board, this phenomenon may be stopped. However, for now, buyers should avoid such jumps unless detailed research is done first.
Good luck with your investments and always do heavy research before starting to spend your money!
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