A new analysis by the Wall Street Journal provides damning evidence that the cryptocurrency market is being controlled by coordinated attacks.
The new study found out that Scammers has been using pump and dump (P&D) schemes to make fortunes from their victims.
Over the last six months, trading groups manipulated the price of digital tokens to the tune of $825 million in trading activity.
Hundreds of millions of dollars have been lost so far for those who fell for the scams. While the scammers have generated hundreds of millions of dollars in revenue for themselves.
The WSJ recorded between January and the end of July, the Journal identified 175 “pump and dump” schemes involving 121 different digital coins, which show a sudden rise in price and an equally sudden fall minutes later.
These activities is been done in private chat rooms, accessible only by invitation, generally overseen by an anonymous moderator.”
The WSJ highlights CloakCoin (CLOAK), as an example of such manipulation. A quick glance at Coinmarketcap reveals that the currency has exhibited cycles of boom-then-bust pricing, with little indication from the industry to warrant such a change in valuation.
Pump-and-dump schemes are still alive and kicking in the equities market, with the Securities and Exchange Commission regularly going after the bad guys. The same can’t be said of cryptocurrency markets since they are unregulated and anonymous.