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Author Topic: PSA: Pump and Dump - aka, the Newbie Trap.  (Read 550 times)
alaszi
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March 26, 2018, 08:11:21 PM
 #41

Awesome story . I always had suspicious thougths regarding PaD, however never really understood why. now it is clear Smiley

Do not misunderstand me as I am strong supporter of the blockchain technology, thus I might be wrong but the altcoin/bitcoin market seems to be a Pump and Dump as well...
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HodorHodl
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March 26, 2018, 08:25:15 PM
 #42

Awesome story . I always had suspicious thougths regarding PaD, however never really understood why. now it is clear Smiley

Do not misunderstand me as I am strong supporter of the blockchain technology, thus I might be wrong but the altcoin/bitcoin market seems to be a Pump and Dump as well...

No misunderstanding my friend, that is a very valid point of view. It's largely (in my opinion, of course) down to the motivation of the vast majority of users. This is not necessarily a bad thing though, because you need opportunists to build momentum. The PnD is a somewhat undesirable effect, but the explosive growth (both in monetary terms and more importantly in publicity terms) is a positive one.

Great observation, thanks for posting! Smiley
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July 06, 2018, 07:59:52 PM
 #43

Hi HodorHodl, I'm a reporter at The Wall Street Journal covering crypto fraud and am interested in hearing more about your experience. Would you be open to sharing your story in the near future via chat (shaneshifflett on discord) email (shane.shifflett@wsj.com) or phone (212-416-2865)? You can read my recent story on ICOs here [Suspicious link removed]j.com/articles/buyer-beware-hundreds-of-bitcoin-wannabes-show-hallmarks-of-fraud-1526573115?tesla=y
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July 06, 2018, 08:13:31 PM
 #44

Newbies that are naive are the victim of these pump and dump telegram group. The owners are the real money makers. They do opposite of what they tell the group.
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July 06, 2018, 09:22:28 PM
 #45

A really excellent post indeed. I never participated in any signal group whatsoever because even I did not understand the mechanism, I knew that I would not be the thieve and that only leaves open a seat for the fool.
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July 07, 2018, 07:42:39 AM
 #46

Yes we all should not support this Pump and dump strategies. The leaders only get the most pumps and the members will get dump.
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July 07, 2018, 01:28:49 PM
 #47

thanks, i hope you story useful for others
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July 07, 2018, 02:28:47 PM
 #48

TL;DR - don't. You will get flattened. The game is rigged, and you can't win.

EDIT: Updated to include "community-vote pumps". TL;DR - they're not better. You're still losing.

EDIT2: This is interesting: http://www.cftc.gov/idc/groups/public/@customerprotection/documents/file/customeradvisory_pumpdump0218.pdf

Hi all,

I have been researching crypto, dreaming about these golden lambos, and probably feeling a little bit of FOMO (Fear Of Missing Out). I wasn't an early-adopter, so I don't have old wallets full of bitcoins, eth or other stuff to play with. I'm entering the markets in January 2018, wondering how I can catch up with the old school, and have some of this magical internet wealth. I'm using my own money, and I'm not in a position to put in much of it, so what I want to see is growth, and I want that growth to be what crypto is famous for - explosive, ridiculous.....free money, right?

It didn't take much time before my reading lead me to the idea of a Pump and Dump. Simple concept, really. A bunch of people get together, pool their buying power, and use it to create a huge upswing in the market. Then once the price has moved up as a result of their purchasing drive, they sell at the higher price, earning awesome paybacks. 50%+ profit is not uncommon to hear about.

How could I resist? I googled it, and immediately joined one of the largest groups for this (42,000 members), whose name I will not post here.I was added to discord and telegram for the group, and was encouraged by the invite-bot to read the rules of the operation, and the schedule, as well as the advantages of the member ranks.

The rules told me to:
1 - Buy at market as soon as I saw the signal, to get in at a good price ASAP
2 - Not to sell until I saw the dump start
3 - Not to whine if I lost money because I was too slow

The schedule told me the exchange (so I could make an account - referral link provided, naturally), and the pairing - i.e. against BTC, ETH, whatever (it's usually one of these two). It did not tell me the coin. This will become important in a few moments.

The member ranking told me that in order to rank up, I'd need to publicise the group, and invite people to join, with these benefits:

1 invite - @Member rank (No time advantage, ability to talk in the chat.)
4 invites - @Representative  (0.5 sec earlier)
10 invites - @Associate (1 sec earlier)
25 invites - @Partner (1.5 sec earlier)
50 invites - @Minister (2 sec earlier)
150 invites - @Ambassador (3 sec earlier)
500 invites - @Top Promoter (3.5 sec earlier)

I took one look at that, and decided it was irrelevant. 3.5 seconds? Yeah, right, I'm quick. I have the golden fingers of a born gunslinger. Right? Member rank would suit me just fine.

I carefully checked the time of the signal - 8 PM EST, which was also 8 PM my time, and it would be on Binance, using an ETH pairing. I freed up all my Eth, taking a couple of small losses on trades to do so. Confident I'd get that back with a cherry on top. Ate early, got some beers to keep beside the computer, and settled in to wait.

January 31st, 20:00:00 - announcement is posted. The coin is MDA.

What the hell is MDA, you ask? I can't answer, because I don't know either. Nor did I care, because I wanted free money. I typed it pretty damn quick though, you can be sure, and hit that buy button as fast as my little digits would react.

And the candlesticks went MAD. Up, up, up, up, up - I've never seen so much green. I hadn't even had time to get the top off a beer, and here I was, already a trazillionaire. But wait, I need to sell now, right?

Here's how I fared out:

Investment: 0.085 Ethereum
Signal: 20:00:00
Bought: I swear this was 20:00:00:00:00:00:01 but maybe not.....price: 00195000 per coin
Time passed: 5 seconds
What happened: Market went insane - green green green
Sold at top of green candles, I *KNOW* I did...didn't I? Price: 00179880 per coin

Hmm....loss 7.75%.

How'd that happen? Well, as follows, and this is why these just don't work:

1 - Coin selection - this is selected by the leader of the group, and you don't seriously think that this is done 2 minutes before the pump, do you? Nope, the leaders will have been slowly buying up MASSIVE volume of this coin, in a way that didn't upset any volume alerts, over weeks. And now they own a shitload of it, all of which was bought at rock-bottom in a dead market.

When you are pressing "buy", they are pressing "sell" - YOU are paying them.

2 - Time - You see, despite the seriously good tech used in (some/many/most/few) exchanges, they're not actually reporting data accurate to like one second. There's a delay, and this is very important! The candlesticks you see are not representing the buy and sell orders in place IN THAT SECOND. But you're sitting there with your finger on the trigger watching the light show, and you do what I did....hit "Market sell". Mistake.

And then you find out how well you did. Grab a tissue.

UPDATE: Member voted pumps...lol

People are getting wise to this now, and I've noticed that some of the newer big groups (30K+ members) are offering "member-voted pumps".

Seems legit, right? I mean, if you're voting, they CAN'T POSSIBLY have this figured out in advance. Even playing field. Lambos at the goalpost.

Except....

They're doing it via a poll. Set choices. You vote on one of 3, or 6, or whatever. They are picking them for you. And holding massive bags of all of the dump coins.

If they miss a few polls in a row, they're OK with this - you get a telegram saying "Due to market conditions, today's dump has been picked by the admins". They're not wise, they're overloaded with some shite that didn't get votes recently Smiley

Again....When you are pressing "buy", they are pressing "sell" - YOU are paying them.

80-90% of people lose money in Pump and Dumps. Some will make money, sure. The leaders who had time to acculumulate the coins YOU were about to buy, and maybe some clever bunnies with bots faster than my fingers.

The victims are generally the group helping to pump, and some poor clowns who saw the price go ballistic and bought in out of sheer "Can't let this pass" panic. Once the dump happens (i.e. well before you knew it was happening), these people are already holding a bag of crap. PnD groups pick dead coins, with no future and no trade for this, so you can't even console yourself that you might get out in 6 months when it explodes. You won't.

I hope this (much longer than I intended) post helps you all. The moral of the story....if it's too good to be true, it's not true. Also, if you can't spot the dummy in the game, it's you.

H.




Great post! I hope a lot of new people see this. I also got caught in one of those and learnt it the hard way - luckily it was not a big amount because I knew it can not be true but when FOMO kicks in it is hard to resist.
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July 07, 2018, 02:57:51 PM
 #49

This OP is certainly amongst those that should be read by people here around the Beginners & Help section. A personal experience that is as well described as this may save many the pitfall of falling for this kind of plot, that recurrently plays on the innocence and eagerness (with a spice of greed) of the gullible.
It is important to warn others of this kind of scam, and that is part of the spirit of this Forum. It is just as important to be able to gather ones thoughts and dedicate enough time to the post itself, as is the case of the OP. The post is not only merited for being useful, but also for the effort behind it’s creation and expressiveness.

Unfortunately the OP’s account has been inactive since the 26th of march 2018, so it will be in the hands of others to add to this thread so as to give it the visibility it deserves, and not get lost on the trillionth page of this forum section by the end of the day…

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July 23, 2018, 09:59:23 AM
 #50

 Angry I wouldn't call that as a trap since those who join such communities are trying to cheat others.
It's a payback.

a b l e     / ♦️ \     New Era of Crypto Finance
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July 23, 2018, 10:55:31 AM
 #51

I can relate to the OP's experience as I still have a dead shitcoins wasting my wallet space doing nothing, earning nothing. Lesson learned the hard way will never be repeated nor forgotten I tell you.
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July 23, 2018, 01:04:51 PM
 #52

This makes perfect sense, I've been fooled by it because it's lulled with their words, but now that I've begun to understand little by little and finally find this post, I hope others read it too. I really appreciate this paper, but I do not have merit so I can not give anything.
btw thank you
 Grin Grin Grin
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July 23, 2018, 01:48:48 PM
 #53

i lost so much as a newbie but it never occured to me to publicize my experience as you have done..
nice write-ups and as for newbies i hope you get access to this article and don't make the same mistakes we did...crypto is future but you have to trend carefully so as to have some money to trade as a pro after learning but if you loose all your money as a newbie.it will be a disater
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July 23, 2018, 01:58:43 PM
 #54

TL;DR - don't. You will get flattened. The game is rigged, and you can't win.
...
 The moral of the story....if it's too good to be true, it's not true. Also, if you can't spot the dummy in the game, it's you.

H.

Very good post, thank you so much for this. I have never experienced this first hand, but I am very grateful for you sharing your experience with it. I have always wondered, how and why these work exactly and I think now I understood a little better!

And I love the "if you can't spot the dummy in the game, it's you!". This should be the no.1 rule for everything one does in the world!

Badman-Crypto
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July 23, 2018, 02:50:07 PM
 #55

I've been in the same situation as this when I first got involved in crypto and didn't realise that these groups were illegal and I lost maybe $60. When the regulation finally catches up to this market I wouldn't be surprised if the ringleaders of these groups are prosecuted. If this was in the traditional markets you could be sure of it (unless it was somebody with a lot of power and influence).

Thanks for the story anyway, I'm sure it will help a lot of newcomers who read it.
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July 23, 2018, 04:22:11 PM
 #56

Clear, simple and well explained!
I hope every newbie will read it to prevent them to fall for it. Thank you OP!

On another scale, some telegram groups (even paid one) called themselves "Signal" groups or so and they do kind of the same (but on another time frame it's not a clear pump candle and dump candle but the result is the same) : They announce that they will give a signal, they give a signal of a specific coin (often a coin with low market cap, that what's should raise a red flag) and they shill it for some time. And then when you buy it during their shilling they sell.

And some of "Youtube ICO reviewers" do kind of the same : They create Hype on some empty/scam ICO, they get free tokens to promote the project and then they sold the tokens when the ico is finished for immediate profits.
First rule on crypto investement : do you own research and don't fall for signals or reviewer guys that will dump on you!

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July 28, 2018, 11:53:51 AM
 #57

The only winner here is the leader of this pump and no one else.

That's exactly it.

There's a new trend now of "community-voted" pump and dumps, and I plan to update the OP when I've finished my notes on this. Also horrific, but better disguised.

Could not agree more! I was a part of some these (paid) groups but trust me, nothing good comes out of this!
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July 29, 2018, 01:04:51 AM
 #58

not just a trap for newbie but also for the uneducated and the poor ones. This is dominated by rich people so it should be a millionaire's game. We just work to give the money we earned back to them.

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July 29, 2018, 03:07:10 PM
 #59

 There's a new trend now of "community-voted" pump and dumps , only winner here is the leader of this pump and no one else. I joined such group in telegram just to read it for fun, cant believe how many gets into it
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August 02, 2018, 09:23:27 PM
 #60

Wow - pretty scary! Thanks for the info!
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