Pump-and-Dump Groups Become ‘Widespread’ as Market Remains Largely UnregulatedThe Social Science Research Network (SSRN) recently published research studying the phenomenon of pump-and-dump groups within the crypto community. The paper — conducted by seven academics from Tel Aviv University, the University of Tulsa and the University of Mexico — concluded that “regulators should be very concerned that price manipulation via pump and dump schemes is so widespread.”
A pump-and-dump scheme is a type of price manipulation where a group of traders aim to drive an asset’s price up through coordinated buying. Once outside investors notice the surge in price, the insider group starts selling the positions they previously acquired at lower prices, thus making a profit.
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