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Chief corporate and financial operator, Australian Securities and Investments Commission (ASIC) revealed that it successfully tracked various encrypted “pump and dump” telegram groups in October. Speaking of this, ASIC shared details of the procedures used by the team to infiltrate malicious encryption groups on Telegram. The new document confirms that since the beginning of October, ASIC has been seeking advice from encryption researcher Talis Putnins.
In the pump and dumping program, the intruder used social media handles to easily complete their illegal operations. Here, social media is used to form user groups in order to attract them to buy large amounts of tokens with less transaction volume. This mechanism helps to artificially increase the price of tokens. It is easy for scammers to pool huge profits after other investors who are not part of the plan enter the transaction and trigger large-scale trade-offs.
According to the 38 slide documents Putnins gave to ASIC researchers, there was a surge in pumps and dumping programs in 2021, similar to the situation in 2018. The introduction stated that such plans are likely to be linked to overall market trends and affect prices. Investigators said that from 2018 to October 2021, several factors have changed.
In just 6 months in 2018, there were 355 such cases of crypto market manipulation, indicating the seriousness of the problem. The document mentions that these plans transparently support price increases, but they lack an attempt to really boost trading momentum. Anyone can easily access these plans. The report disclosed information about the Telegram group “Crypto Binance Trading | Crypto Binance Trading”. Signal and pump’. The organization triggered a raid on Frax Share, a fractional algorithm stablecoin system, in September. The project recorded a huge price increase of 90% in less than a minute.
What is the reason for the success of Pump and Dump Schemes?
The detailed introduction reveals the various reasons for the success of such plans. These include anonymous groups, encryption, and lack of legal risks. It is generally believed that due to the lack of regulation of cryptocurrencies, pumps are legal. The speech concluded that defective pumps and dumping scams have caused serious price manipulation in the industry. They distorted nearly 65% of price trends on average, triggered abnormal trading operations worth millions of dollars in the entire field, and helped to transfer huge amounts of money between traders.
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