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How to spot a crypto pump and dump scheme?

One of the most common methods is called a “pump and dump scheme”. There are several ways scammers can implement such a strategy, which can make it tricky to spot new investors. Here are the telltale signs of how to spot a crypto pump and dump scheme: Be wary of new cryptocurrencies without a track record.

What is a crypto pump-and-dump scam?

A crypto pump-and-dump is a market manipulation scam where perpetrators create or obtain large amounts of an altcoin, promote it to fraudulently inflate (pump) the token price, and then cash out by selling (dumping) them to unsuspecting investors. When perpetrators dump their tokens, the supply increases as the price decreases.

What are crypto dump signals?

After the pumping causes a significant price hike, which are called crypto dump signals, members start selling at a good profit. There are two types of groups on Telegram and Discord that post signals on unknown crypto coins to inflate the value of the underlying coins artificially, as explained below:

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