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GameStop FOMO inspires a new round of encrypted pump dumps

GameStop FOMO inspires a new round of encrypted pump dumps

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As a semi-public forum, Discord is an ideal tool for these pumps. It allows users to widely advertise the server, ping users on coordinated buying, and discuss strategies. I am a long-time Discord user, and interestingly, my activity volume has greatly increased. Between the beginning of April and May, I received 47 invitations to join the encrypted pump group through Discord. Eight of the teams have more than 20,000 members; the largest is more than 80,000. Several of the moderators of these servers said that they paid people (called “advertisers”) to send spam to Discord users who invited them (sometimes including cryptocurrency giveaways).

The new members were welcomed by FAQs that describe 2,000% of pumps and potentially hundreds of benefits. That is not necessarily reality. “The Discord server is a casino. As the saying goes, “The house always wins, and the house is the house. “Thomas Hurley, 21, said he is a member of several encrypted pump Discord servers. After the encrypted evangelist started joining his game server to promote pump ads, he tried several times to coordinate price promotions. He never made a profit. How much money is reached, but others have made it. When Hurley began to carefully check the market trading pages of these coins on websites such as Binance, he noticed some interesting patterns.

He said: “A few seconds before they announce which coin to inject, there will be a huge spike.” It looks like a person of insight has purchased a lot of coins in advance, which greatly improves their profit by selling early. potential. Hurley never had a chance.

He is not alone.A kind 2018 research The Telegram-based pumping machine team found that five minutes before the pumping signal was sent (even before the coin was leaked), the price of the designated coin increased by about 5%. At that time, on average, only investors who bought within the first 20 seconds after the draw were able to make a profit. The source said that nowadays, the development of crypto pumps is so fast that enthusiasts have commissioned robots to buy and sell coins based on Discord’s announcement. Pump It Up, the owner of a server, said he lost several hundred dollars because he didn’t use a robot that could buy and sell in milliseconds. Experience prompted him to form his own team in February.

Josh Kamps, a PhD student in crypto fraud at University College London, said: “Cryptocurrencies will provide prey to less informed people in space.” Those who discovered GameStop later wanted to skip to the next step. A big event. Kamps (Kamps) curiously noticed that many inefficient alternatives emerged at that time, he said, “a lot of the design is to pump water.” He said, for example, pump sets flocked to Shiba Inu Coin (or SHIB). An imitation WallStreetBets pumping group advertisement stated that they had pumped more than 4 times the profits of SHIB. In the past 24 hours, the transaction volume of this meme coin exceeded $6.1 billion.

“Discord welcomes all kinds of personal finance discussions, including cryptocurrencies, investment clubs and day traders, and encourages the creative use of our platform, as long as there is no circumstance that harms our value or does not amount to illegal activities,” Discord The spokesperson said in an email. wired. They warned Discord users to carefully study the suggestions they received on the Internet.

The encryption pump plan belongs to the gray legal realm. Professor Donghwa Shin of the University of North Carolina at Chapel Hill, who co-authored the 2018 research report, said: “There is a lot of debate about whether to treat cryptocurrencies as securities.” For securities, margin trading is illegal, but for cryptocurrencies In terms of it is illegal. He said, “That’s why there is no clear stipulation.” Shin thinks it’s time to change. According to his research, the liquidity and value of these currencies have increased in cryptocurrency exchanges that prohibit pumping and dumping. Not only is the market getting better, but the small group of people who organize these pumps (the ones who can make money from them the most) will also be more challenging to take advantage of other pumps.

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