The cryptocurrency pump and dump that has trailed different cryptocurrency this year are induced price manipulation by a group for profit, as revealed by The Wall Street Journal. The manipulation that has taken place for the past six months has led to the generation of $825 million this year.

According to a research carried out by the Wall Street Journal on the trading data and online communications between cryptocurrency trader, with January and July, it revealed that 175 pumps and dump plot across 121 cryptocurrencies took place.

The price manipulation was revealed according to the data obtained from online communications of the crypto trader, of which the most dominant online group that was suspected to have impacted the pump and dump of crypto most is a telegram group.

The telegram group on Twitter is named Big Pump Signal with 74, 000 followers and has created 26 pumps that resulted in $222 million.

Pump and dump are known as a form of securities fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, to sell the cheaply purchased stock at a higher price.

The research of the wall street journal revealed that there had been an influx of over $12 billion into coin offering since January of 2017, as pump schemes dominate the trend. The fund injection into ICO and the unrelated market makes it very vulnerable for investors to become victims of price manipulation.

The pumping scheme follows Sam pattern as revealed by analysts, the groups announced a particular agreed time to exchange for a pump, as they trade, it creates a frenzy pump in price which suddenly dumps again afterward. More than Half of the 50 cryptos with the highest pump through the manipulation had lost their value.

Among cryptocurrency that has been a tool for the scheme is Cloakcoin in July, that experienced a sudden rise of 50% and a dump of 20% in two minutes.

Pump and dump scheme is a trend that is not new, as it is a tool for market fraud, far way back as the 1930s and has continued to trend at every junction in history. Tackling the situation is necessary to avoid investors falling into wrong trades with the loss. This can be addressed by bringing proper regulations to markets, especially cryptocurrency that is unregulated presently.

Presently to aid the process of fighting pumps and dumps of cryptocurrency the U.S. Commodity Futures Trading Commission (CFTC) has been attempting according to a February release.

The release states “If you have original information that leads to a successful enforcement action that leads to monetary sanctions of $1 million or more, you could be eligible for a monetary award of between 10 percent and 30 percent.”

As the fight continues, a long-lasting solution to the pump and dump is as expected in the crypto community presently, and that is the approval of Bitcoin ETF by SEC. The successful step of approval will aid the growth of the crypto community at large also.

The post Price Manipulation By A Group Has Generated $825 Million This Year appeared first on ZyCrypto.

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