The "pump and discharge" systems existed long before the invention of the cryptocurrency. What is striking about encryption markets is that this kind of manipulation is done in the open ... on different social media channels, for example Telegram, BitcoinTalk, and Reddit, where a group of people gather to buy a certain currency at a certain price and sell at the same time A specific time when the price reaches the target. They often publish false or misleading information to persuade unsuspecting investors to buy during the preparation period.
While this kind of deal may be refreshing when compared to secret manipulation by big bank traders a decade ago, the proliferation of these groups underscores the risks facing investors in the electronic currency.
"This type of manipulation unfortunately affects the vast majority of new investors. If we want the industry to thrive, we need to work together to prevent and close these channels and groups," said Oleg Siddak, chief executive of Placamon Financial Group, a platform for lending to the foreign exchange market.
A number of measures have been taken to prevent such activities, most notably
The Commodity Futures Trading Commission (CFTC), the US regulator of derivatives, announced in February that it would pay a reward to those who provide information on such activities.
Tracy Schmeltz, a partner in Chicago and Washington, said
"For encrypted experiences that are traded in multiple markets, the trader can move the market globally by moving the price in one stock market"
How to protect yourself?
Investors should be careful to follow the pricing as shown on stock exchanges. Before each purchase you can first watch the price in more than 5 bourses at least
Schmeltz added.
Like it or not, encryption is here to stay. With the development of the market for scammers, scammers will be excluded where regulations are imposed. Until then, we can expect some blood to fall along the way.
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