[ad_1]
A recent study found that pump and landfill schemes account for around $ 7 million in commercial volume per month, according to MIT Technology Review on December 4th. The analysis was performed by researchers Jiahua Xu and Benjamin Livshits from Imperial College London.
A pump and dump scheme is a form of securities fraud that has also become common in the cryptocurrency space. The organizers of the scheme choose a currency, increase its price and then "unload" sell their overvalued currency, which further leads to lower prices and losses among investors.
While cryptocurrency markets are currently in trouble, with some currencies reaching new lows in November, the daily trading volume is currently $ 14.2 billion, according to CoinMarketCap. The volume of pumps and landfills mentioned in the study represents only 0.049 percent of the total trading volume over 24 hours.
In the course of their research, analysts focused on a pump and a scam with a currency called BVB on November 14, 2018. They gathered details following announcements on several Telegram channels, including official McAfee Pump signals. , and recorded the price variations and trading volumes of the selected currency.
Reportedly, McAfee Pump Signals revealed BVB, which had been inactive for over a year at that time, with little trading activity and a value of about 35 satoshi ($ 0.00132202). 1 satoshi is equal to 10-8 Bitcoins (BTC).
The first purchase order was entered and completed within a second from the first announcement, according to Xu and Livshits. The price of the currency rose to peak after only 18 seconds, reaching 115 satoshi ($ 0.00434378).
The participants took "three and a half minutes after the pump and discharge" to take their profits, after which "the price of coins had fallen below its open price," the researchers said . The analysis revealed that those who joined the activity more than 18 seconds after it began almost could not make profits.
In addition, Xu and Livshits investigated other 236 pump and landfill scams made between July 21st and November 18th, concluding that "many of them were preceded by unusual buying activities in the destination currency". The researchers said:
"The study reveals that the organizers of pumps and landfills can easily use their privileged information to get extra income from the sacrifice of other blowers."
The researchers suggest that it is possible to identify the target currencies before they are revealed by looking for unexpected transactions in dark currencies. Xu and Livshits have appealed to the historical data of known pump and landfill schemes to train an automatic learning algorithm to track the telltale signs that a scam will soon occur.
In August, the Wall Street Journal stated in a study that the manipulation of cryptocurrency prices was largely conducted by organized "business groups" that used services such as Telegram. The WSJ has suggested that the coordinated "pump and dump" schemes have seen traders inflate and bring down the prices of various cryptocurrencies this year.
[ad_2]Source link
