A recent Tweet from the Russian crypto exchange, YoBit, reveals that the exchange is going to initiate a pump scheme on random coins.
The news was shocking to many and comments on the Tweet argues that the Twitter account must have been hacked. However, it does not seems so since YoBit has even implemented a countdown clock for the pump and dump scheme. They will buy ten random coins for 1 BTC each every one minute and do so ten times.
A pump and dump scheme is a form of fraud that tries to artificially boost the price of an asset through misleading or through false recommendations. The community reacted to the Tweet and stated that the exchange would steal money through doing the pump and dump which other users supported. Most people, however, were really surprised to see an exchange do this:
“Thanks for the link. Looks like Yobit is serious about it, unbelievable. Also, never meant to say you yourself edited the image and you are right credibility, is everything in this space. Sill surprised to see an exchange do this”.
YoBit is a Russian based exchange for digital currencies founded in 2015. The exchange offers hundreds of different currency pairs to their customers. According to CoinMarketCap.com, YoBit has a daily volume of 30 million U.S. dollars which is small compared to the largest exchange Binance, that has a daily volume of 1,2 billion U.S. dollars.
Pump and dump schemes are more common that one might think and two months ago, Toshi Times covered a story about the very subject. The Wall Street Journal took a look at the pump and dump schemes, and according to their study, the schemes generated more than $825 million in trading activity over the last six months.
YoBit has been involved with pump and dumps schemes in the past as well, according to Bussiness Insider. The news came out in November 2017 and to orchestrate the schemes, YoBit used the Telegram app, and Their strategy was to suddenly inflate the price of a cryptocurrency by coordinating a few buyers to act at specific times. Then, after the price rises, they attract other, unwitting investors to buy into the price momentum. The “pumpers” quickly sell the coin to make a profit. The coins often crash just minutes after the initial surge, leaving the second wave of investors with losses.
Image Source: “Pexels”
My name is Dennis Sahlström, I have been trading and investing since 2012 and have since June 2017 made between 3-6% a month. I have been watching the crypto market since the beginning of 2017 and saw the great returns a lot of people had gotten. I thought I needed to do my research! Since then I have been studying the crypto market and realised the great potential Blockchain have. Some say it’s internet 3.0 we are looking at and I am sure its here to stay. It is already changing industries and the world. Also, I am running a crypto education platform because I think people should educate themselves about the opportunities we have in front of us.