Cryptocurrency Pump & Dump Gang! The Outline.

How self-proclaimed “pump and dump groups” scam thousands of wannabe altcoin investors.

Every few days, 200,000 strangers come together online to buy little-known cryptocurrencies, also known as altcoins, at exactly 2 p.m. Eastern time. Then, anywhere from 30 to 120 seconds later, they sell them en masse (or at least try to). Those who buy and sell at the right time can potentially make out like bandits.

Welcome to the wild world of altcoin “pump groups,” where participants believe they are the wolves, but they’re actually probably the sheep.

“Pumping is the process through which a large group of people agree to buy a certain coin at a particular time,” reads the welcome messages for The Alt Pump, a pump group based in the messaging app Discord that has more than 30,000 members. “With this group, you will have large amounts of people buying a coin at the same time. This will pump the price straight up. After this the dumping part comes in. After the price rises tremendously up because of the pumping, we start selling at a good profit. This is called dumping.”

The pump group ethos is simple: Buy low, sell high. The implication is that investors outside the pump group will see the rapidly rising price and rush to buy in, anxious not to miss the next Bitcoin-style gold rush. But the reality is a bit more complex.

Instant, easy wealth is always the founding principle of a pump group, whether it’s presented in terms that seem reasonable, like “at least a 300% return on your investment,” or ridiculous, “[GET] READY FOR A FUCKING LAMBO” (both of which are actual messages sent in groups). These groups are promoted heavily on Facebook, Instagram, and Twitter as both ads and general posts, but they almost exclusively operate on semi-anonymous messaging services like Discord and Telegram.

Read the full article on TheOutline.com