GameStop FOMO inspires a new round of encrypted pump dumps

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As a semi-public forum, Discord is an ideal tool for these pumps. It allows users to widely advertise the server, ping users and discuss strategies for coordinated buying. I am a long-time Discord user, and interestingly, my activity volume has greatly increased. Between the beginning of April and May, I received 47 invitations to join the encrypted pump group through Discord. Eight of the teams have more than 20,000 members; the largest members exceed 80,000. Several of the moderators of these servers said that they paid people (called “advertisers”) to send spam to Discord users who invited them (sometimes including cryptocurrency giveaways).

The new members are welcomed by FAQs that describe 2,000% of pumps and potentially hundreds of benefits. That is not necessarily reality. “The Discord server is a casino. As the saying goes, “The house always wins, and the house is the house. “Thomas Hurley, 21, said he is a member of several encrypted pump Discord servers. After the encrypted evangelist began to join his game server to promote pump ads, he tried several times to coordinate price promotion. He never made a profit. How much money is reached, but others have made it. When Hurley began to carefully check the market trading pages of these coins on websites such as Binance, he noticed some interesting patterns.

He said: “A few seconds before they announce which coin to inject, there will be a huge spike.” It seems that someone who knows bought a lot of coins in advance, greatly increasing their potential to make money by selling early. Hurley never had a chance.

He is not alone.A kind 2018 research The Telegram-based pumping machine team found that five minutes before the pumping signal was sent (even before the coin was leaked), the price of the designated coin increased by about 5%. At that time, on average, only investors who bought within the first 20 seconds after the draw were able to make a profit. The source said that nowadays, the development of crypto pumps is so fast that enthusiasts have commissioned robots to buy and sell coins based on Discord’s announcement. Pump It Up, the owner of a server, said he lost several hundred dollars because he didn’t use a robot that could buy and sell in milliseconds. Experience prompted him to form his own team in February.

Josh Kamps, a PhD student in crypto fraud at University College London, said: “Cryptocurrencies will provide prey to less informed people in space.” Those who discovered GameStop later wanted to skip to the next step. A big event. Kamps (Kamps) curiously noticed that there were many inefficient alternatives, he said, “quite a lot of design purpose is to pump water.” He said, for example, pump sets flocked to Shiba Inu Coin (or SHIB). A copy of the WallStreetBets pump set advertisement stated that they made more than 4 times the profit at the price of SHIB. In the past 24 hours, the transaction volume of this meme coin exceeded $6.1 billion.

“Discord welcomes all kinds of personal finance discussions, including cryptocurrencies, investment clubs and day traders, and encourages the creative use of our platform, as long as it does not affect our value or equals illegal activities,” a Discord spokesperson said Said in an email. wired. They warned Discord users to carefully study the suggestions they received on the Internet.

The encryption pump plan belongs to the gray legal realm. Donghwa Shin, a professor at the University of North Carolina at Chapel Hill, who co-authored the 2018 research report, said: “There is a lot of debate about whether to treat cryptocurrencies as securities.” Raking and dumping are illegal for securities. Not a cryptocurrency. He said, “That’s why there is no clear stipulation.” Shin thinks it’s time to change. According to his research, the liquidity and value of these currencies have increased in cryptocurrency exchanges that prohibit pumping and dumping. Not only is the market getting better, but it will be more challenging for the small group of people who organize these pumps (those who can always make money from them) to take advantage of other pumps.

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