P ump and D ump Fra ud in Crypto cur rency

How does P ump and D ump work ?
In the cryptocurrency market , P ump and D ump is a d ishon est form of market manip ulation in which a group of people intention ally raise the price of a particular cryptocurrency and then sell their assets as soon as the price ris es . Such sc ams typ ically occur in four separate ph ases : the warm - up phase , the launch phase , the pump phase , and the dump phase .
Fra ud explo its investor ent h usias m and the lack of traditional reg ulation in the cryptocurrency market , making it a highly risk y and un ethi cal price manip ulation strategy designed to benefit individuals .
The Squ id Case
Squ id Coin is a digital token inspir ed by the popular Netflix series Squ id and position ed as a " play and earn " cryptocurrency . It experienced a huge jump in value - from 1 cent to more than $2, 85 6 in less than a week - before its value pl ung ed 99. 99%. The affa ir un fold ed as a classic " p ull ing the car pet " scam : having raised enough funds , the develop ers stopped trading and hid with about $3. 38 million . The buy ers were subse qu ently un able to res ell their tok ens , and the project ' s website and social media accounts disappe ared , confir ming that the token was a fraud .
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