Internet
pump and dump
What does pump and dump mean?
A manipulation scheme where promoters inflate ('pump') a coin's price through hype, then sell ('dump') their holdings onto the new buyers, collapsing the price.
"That Telegram group is just running pump and dump schemes on low-cap coins."
Origin
A term from traditional stock fraud, especially penny-stock scams of the 1990s, now illegal in regulated markets. Crypto's unregulated nature made pump and dumps rampant, often run openly in chat groups.
Frequently asked questions
What does 'pump and dump' mean in crypto?
It's a scheme where insiders hype a coin to inflate the price, then sell at the top, crashing it on everyone who bought late.
Are pump and dumps illegal?
In regulated stock markets, yes. In much of crypto they run openly in chat groups due to weak regulation, but they're still a scam.
How do I avoid a pump and dump?
Be suspicious of coins with sudden hype and no fundamentals, especially ones pushed hard in chat groups promising fast gains.
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