Cryptocurrency enthusiasts view, and as the future of money. The underlying blockchain technology allows crypto to work by creating a digital ledger that records transactions, which would seemingly create a safer form of currency. But where there’s money to be made, scammers aren’t far behind.
Crypto pump-and-dump schemes are designed to take advantage of people while making some big money for scammers. They generally involve influencers who receive financial incentives for telling people to buy a certain digital coin in order to raise its value. Once the value goes up, the scammers and influencers sell their coins and pocket the profits, while everyone else sees their investments lose value.
These schemes mark the latest twist in the ever-changing story of cryptocurrencies, which have created some millionaires while bankrupting others through their persistent volatility. Even Dogecoin, a cryptocurrency created as a joke, garnered mainstream attention thanks to high-profile figures such as Tesla CEO Elon Musk, who said at last week’s B conference that he “pumps, but doesn’t dump.”
He’s not the only one.
Earlier this month, popular esports organization FaZe Clan suspended multiple members who participated in a crypto pump and dump disguised as a charity drive while taking home tens of thousands of dollars.
With cryptocurrencies becoming easier to develop, scammers are taking advantage of people who have developed FOMO, or “fear of missing out,” and are looking to jump on new crypto coins in hopes of getting rich.
Here’s what you need to