[ad_1]
Paper: +4,800 Crypto Pump and Dump Ploys Over 2 quarters in 2018
December 20, 2018 by William Peaster
A group of economists published a paper on December 18 in which they identified more than 4,800 crypto-pump and landfill schemes on over 300 cryptocurrencies over a one-year period in 2018. The first report of its kind strengthens the conventional wisdom according to which the invincible cryptocurrency remains full of manipulations.
See also: In Shift from the White Paper, Sub-layer to start trading with the ICO Treasury
Subscribe to the Bitsonline YouTube channel for fantastic videos with experts and industry insiders
The most lucrative dark coins for cryptocurrency and landfill campaigns, economists say
The paper, titled "The Economics of Criptovalute Pump and Dump Schemes", was written by two Israeli and five American economists and explored the prevalence of cryptocurrencies and dumping patterns on the popular messaging services Discord and Telegram in 2018.
More than two quarters this year, the analysis of the authors found the existence of 1,051 pump and landfill schemes on Discord and 3,767 schemes of this type facilitated through Telegram.
The manipulated cryptocurrencies were over 300, the researchers found.
A general practice of manipulation of the market, pump and dump maneuvers involve the artificial inflation of the value of an asset through coordinated group campaigns in order to conduct selloff during an acute price spike.
"These comprehensive data provide the first measure of the pump and discharge schemes in cryptocurrencies and suggest that this phenomenon is widespread and often quite profitable," the authors pointed out in their abstract.
"This should raise concerns among regulators".
Economists also noted that the smallest and least known cryptocurrencies were the most profitable currencies to pump, to the extent that it takes far less trade volume to drastically shift these markets in both directions:
"We find that the degree of money (market capitalization / volume) is the most important factor in determining the profitability of the pump: pumping dark coins (with a low volume) is much more profitable than pumping the dominant currencies in the ecosystem. "
With increasing awareness, manipulation of a growing thread in 2018
Manipulative trading has proven to be the main fodder so far this year in cryptoverse.
In November, US Securities and Exchange (SEC) chairman Jay Clayton said that manipulation should hold onto the crypto-economy more tightly before a cryptic ETF materializes in America.
Also this November came the launch of the Association of Digital Asset Markets (ADAM), a non-profit group focused, at least in part, on the spread of market manipulation in cryptocurrency markets.
Previously, this fall also saw the publication of a report by the New York Attorney General's Office declaring "only a few [exchanges operating in New York] reported having a formal policy in place "to repress market manipulation.
During the summer, the Coinbase exchange power plant stated that it was building its own market surveillance system to track abusive trading patterns on its services.
Reports also emerged in June that the US Commodity Trade Commission (CFTC) was investigating possible manipulative transactions on Bitstamp, Coinbase, itBit and Kraken.
The recent Trading Wash report also raises the Red Flags
A December report by the Blockchain Transparency Institute (BTI) found that up to 80% of the volume of the first 25 pairs of bitcoin trading was counterfeited through the washing trade for a period of three months this year.
Another general practice of market manipulation, the washing trade involves creating volumes of artificial trade and false requests through simultaneous purchases and sales of an asset.
It is not the first time that the washing trade, or even the BTI, is in the title of the cryptocurrency in 2018.
In their latest report, BTI suggested that exchanges such as HitBTC, Huobi and OKEx seemed to be among the main space washing operators.
What do you think about it? How should the collective cryptoeconomy in its state of maturation go into conflict with the manipulation of the market, eg. scrambled pump and exhaust maneuvers? Let us know in the comments section below.
Images via Pixabay
