Pump and Dump

[BitcoinNewbie15]

Hi, I know that pumping and dumping is illegal, so how do i avoid it? If I buy a few coins and a few days later they rise up and then i sell them when they are up, is that considered pumping and dumping?

[galbros]

If you just trade for a profit that is not illegal.  I'm not even sure pump and dump is illegal.  You may be confusing it with insider trading.

Not a lawyer but what you are describing is fine.  You may want to research pump and dump more if you are planning on trading.

Good Luck.

[BitcoinNewbie15]

If you just trade for a profit that is not illegal.  I'm not even sure pump and dump is illegal.  You may be confusing it with insider trading.

Not a lawyer but what you are describing is fine.  You may want to research pump and dump more if you are planning on trading.

Good Luck.

Thanks for the reply, I read about pumping and dumping on its wiki: http://en.wikipedia.org/wiki/Pump_and_dump and from what it says is that when a company pays people to rave about their stocks so their price goes up, then they sell their shares which causes investors to lose money, however that is for stocks... So im not sure if its much different from cryptocurrencies.. So just a regular joe that buys low and sells high should be fine? I'm also not talking about bitcoin... im thinking of investing in bitcoin plus (XBC)

[DannyHamilton]

If you just trade for a profit that is not illegal.  I'm not even sure pump and dump is illegal.  You may be confusing it with insider trading.

Not a lawyer but what you are describing is fine.  You may want to research pump and dump more if you are planning on trading.

Good Luck.

Thanks for the reply, I read about pumping and dumping on its wiki: http://en.wikipedia.org/wiki/Pump_and_dump and from what it says is that when a company pays people to rave about their stocks so their price goes up, then they sell their shares which causes investors to lose money, however that is for stocks... So im not sure if its much different from cryptocurrencies.. So just a regular joe that buys low and sells high should be fine? I'm also not talking about bitcoin... im thinking of investing in bitcoin plus (XBC)

If you start actively and intentionally spreading false information for the purpose of trying to scare people into selling as much of their bitcoin as possible as fast as possible to artificially lower the exchange rate before you buy...

Or if you start actively and intentionally spreading false information for the purpose of trying to scare people into buying as much bitcoin as possible as fast as possible to artificially increase the exchange rate before you sell...

Then you are acting immorally, irresponsibly, and unethically.  Whether or not your actions are illegal is yet to be determined, but I'd love to see you stuck in court for a few years while the judges, lawyers, and juries try to figure it out.

"pump and dump" doesn't mean buy and sell, it means "lie to lots of people to prey off their insecurities" (pump), and "unload something that you know is worthless to an unsuspecting victim that has fallen for your lies" (dump).

[BitcoinNewbie15]

Ok, so i really want to avoid pumping and dumping, as it is illegal, but, XBC is very volatile. So it is possible to buy low and sell high multiple times a day. Thus basically generating free money. That can't be legal. Is that considered pumping and dumping??

[poornamelessme]

Ok, so i really want to avoid pumping and dumping, as it is illegal, but, XBC is very volatile. So it is possible to buy low and sell high multiple times a day. Thus basically generating free money. That can't be legal. Is that considered pumping and dumping??

If pumping and dumping was considered illegal in cryptoland, I think 99% of the people in this forum would be arrested. And all trollboxes would get raided by the police. Lying/trolling/spreading fud to lower a price and then hyping a coin to simply get a better sell price, is morally wrong and I find it extremely annoying ... but I wouldn't say it's illegal.

I don't think pump/dumps are good, but if you buy low and sell high, and think you can do it ... be my guest. It's basically day trading, so unless you know what you are doing, I wouldn't even bother trying it. You may sell high... and then find out a couple of hours later the price went up with 50% (on any coin). There is a lot of volatility with most coins. As for XBC, it's on one small-ish exchange at the moment, so is more prone to volatility right now.

[BitcoinNewbie15]

Ok, so i really want to avoid pumping and dumping, as it is illegal, but, XBC is very volatile. So it is possible to buy low and sell high multiple times a day. Thus basically generating free money. That can't be legal. Is that considered pumping and dumping??

If pumping and dumping was considered illegal in cryptoland, I think 99% of the people in this forum would be arrested. And all trollboxes would get raided by the police. Lying/trolling/spreading fud to lower a price and then hyping a coin to simply get a better sell price, is morally wrong and I find it extremely annoying ... but I wouldn't say it's illegal.

I don't think pump/dumps are good, but if you buy low and sell high, and think you can do it ... be my guest. It's basically day trading, so unless you know what you are doing, I wouldn't even bother trying it. You may sell high... and then find out a couple of hours later the price went up with 50% (on any coin). There is a lot of volatility with most coins. As for XBC, it's on one small-ish exchange at the moment, so is more prone to volatility right now.

Oh ok. Because i know its illegal in stocks, but if i am just buying and selling without spreading any hype or FUD, im are fine and not pumping and dumping?

[poornamelessme]

Oh ok. Because i know its illegal in stocks, but if i am just buying and selling without spreading any hype or FUD, im are fine and not pumping and dumping?

How are you actually the one doing the pumping if you just buy/sell a coin? Do you have tons of btc to put in fake buy orders to push up a price? If so, I doubt you'd ask if it was okay or not.

If you simply buy low, sell high, there is nothing wrong with it. Determining when high is high enough... and low, low enough, is the tricky part.

[gts476]

Ok, so i really want to avoid pumping and dumping, as it is illegal, but, XBC is very volatile. So it is possible to buy low and sell high multiple times a day. Thus basically generating free money. That can't be legal. Is that considered pumping and dumping??

You are not generating free money, you are taking money from other people.

Trading is zero sum. For you to win, someone else has to lose.

If you want to trade multiple times during the day then learn to daytrade.

If you want to avoid pumping and dumping as much as you can then only trade in highly capitalised markets.

In summary;

Learn 2 trade and stay away from XBC

[SuperKing]

It is only a simple game that manipulated by some people.
Do not be too serious.
And do not put too much in this.
Good Luck!

[gts476]

It is only a simple game that manipulated by some people.
Do not be too serious.
And do not put too much in this.
Good Luck!

Listen up sparky, here's the deal.

Take all the money you want to invest and put it in a pile.

Split that pile in 2.

1 pile contains 95% of your loot, the other, 5%.

Give the 95% to a mate. Tell you mate if you ask for this within 3 months, you mate may kick you in your fucking balls free from reprisal.

Write that last bit down for him, like a contract.

Take you 5% and get involved! w00t! Start trading and keep a journal.

You will lose you 5%.

When you have lost you 5%, return here and write an essay as to why and what you would do differently.

We will then troll you for the remainder of the 3 months.

When the 3 months are over return to your mate for you pile of loot.

Split that pile in 2.

1 pile contains 95% of your loot, the other, 5%.

Give the 95% to a mate. Tell you mate if you ask for this within 3 months, you mate may kick you in your fucking balls free from reprisal.

Write that last bit down for him, like a contract (again).

Take you 5% and get involved! w00t! Start trading and keep a journal.

You will not lose you 5%. Holy shit WTFLOL?!?!!

When return here, write an essay as to why you didn't lose your 5% and what you would do differently. did you alter your behaviour?

We will then troll a little bit but not as much

Return to your mate and give him all your loot.

Then take from him the now bigger pile of loot.

Split that pile in 2..................

1 pile contains 95% of your loot, the other, 5%.......

And so on and so on.

G.

[CoinHumper]

Hi, I know that pumping and dumping is illegal, so how do i avoid it? If I buy a few coins and a few days later they rise up and then i sell them when they are up, is that considered pumping and dumping?

Where do you get that?

[r0ach]

You are not generating free money, you are taking money from other people.

Trading is zero sum. For you to win, someone else has to lose.

If you want to trade multiple times during the day then learn to daytrade.

If you want to avoid pumping and dumping as much as you can then only trade in highly capitalised markets.

This is false.  All currencies whether it be the dollar, cryptocurrency, or even gold are basically IOU's for future goods or services, and they all share ponzi/pyramid characteristics.  

If the sun were to explode and kill everyone (which it probably will), then those future IOUs don't have to be paid, and the system has now worked without anyone having IOUs they can't redeem.

People dying while having a net worth > 0 also usually contribute to keeping the IOU chain alive.

Therefore, it's possible to not take away things from other people (zero sum), if they either die while still having IOUs, or just pass the buck down to the next guy.

[RobFordWotWot]

All profits are illegally obtained goods which can be confiscated by the federal government at will. Read the constitution.

[hiroshi_yamo]

If I buy a few coins and a few days later they rise up and then i sell them when they are up, is that considered pumping and dumping?

My understanding (I'm not a lawyer either and this isn't legal advice) is that trading a crypto that is being pumped is fine but intentionally manipulating markets (encouraging people to pump or dump a crypto) may be illegal.

[MicroGuy]

Hi, I know that pumping and dumping is illegal, so how do i avoid it? If I buy a few coins and a few days later they rise up and then i sell them when they are up, is that considered pumping and dumping?

Day trading is risky and unpredictable.

I think the best strategy is to find a coin you believe in and hold for the long term as you work to advance the coin.

[BitcoinNewbie15]

Hi, I know that pumping and dumping is illegal, so how do i avoid it? If I buy a few coins and a few days later they rise up and then i sell them when they are up, is that considered pumping and dumping?

Where do you get that?

http://en.wikipedia.org/wiki/Pump_and_dump

https://answers.yahoo.com/question/index?qid=20080514182551AAX7hLK

http://www.cbsnews.com/news/pump-and-dump/

[Nxtblg]

Hi, I know that pumping and dumping is illegal, so how do i avoid it? If I buy a few coins and a few days later they rise up and then i sell them when they are up, is that considered pumping and dumping?

Day trading is risky and unpredictable.

I think the best strategy is to find a coin you believe in and hold for the long term as you work to advance the coin.

Yeah, that's my style too. There seem to be people who thrive as day traders, but I know I'm not one of them: when I try, I'm pretty ham-handed. So, I stick to what I'm comfortable with.

There's another reason too. Imagine a fellow who snapped up Bitcoin at Mt. Gox in 2010 (when they still allowed people to deposit with PayPal!), withdrew the BTC, lost interest, and then forgot all about Bitcoin. When 2013 came along and Bitcoin hit the headlines, the fellow suddenly gets his memory jogged and remembers that he bought some in 2010. Only, the coins he bought for between 10 cents and $1 are worth ~$1,000 each!

I submit that only a fellow like this, or a real true believer in Bitcoin, would have held on for that long. Everyone else would have been too tempted to cash in when Bitcoin hit $2, $5 or $10. A guaranteed double, triple or ten-bagger is just too seductive for anyone except the true believer - or someone who just plumb forgot that he had any.

[DannyHamilton]

Ok, so i really want to avoid pumping and dumping, as it is illegal,

That sounds like a good plan

but, XBC is very volatile.

Yes, it is.  What does that have to do with the discussion we are having?

So it is possible to buy low and sell high multiple times a day.

Yes.  It is also possible to buy high and sell low multiple times a day.  Timing a volitile and unpredictable market such as Bitcoin is an extremely difficult thing to do.  In addition, every trade you make will probably have an exchange fee, and there will be a bid-ask spread you will have to deal with.  This means that you have to do significantly better than random guessing, or all you'll be doing is earning money for the exchange service.

Thus basically generating free money.

It is not "free money".  You are providing a service to the community, and you are purchasing risk.

Most retail businesses buy their inventory at wholesale prices, and sell retail prices.  In other words, they "buy low" and "sell high".  The difference is their gross revenue.  They use some of this revenue to pay their various costs, and to purchase additional inventory to replace what has been sold.  The remainder (if any) is their "profits".  Are these businesses "generating free money"?

That can't be legal.

Buying items at the cheapest honest price you can get, and selling the items at the most expensive honest price you can get?  Why wouldn't that be legal?  If it isn't how could any retail business exist?

Is that considered pumping and dumping??

No.  Pumping and dumping is lying and spreading false information to prey on the insecurities of others to artificially increase the price that you can sell at, and then selling at this artificially high price before enough people realize that the information you are spreading is fraudulent.

As an example.  Imagine that you are in charge of the stories that make it on air on CNN.  Imagine that you quietly purchase a few hundred thousand dollars worth of bitcoins at the current exchange rate.

Next you have your news anchors start broadcasting fake stories about how "Berkshire Hathaway has announced that they will be purchasing ten million dollars of bitcoins per month for the next 6 months".  You then run some fake stories about how "sources have determined that Bill Gates plans to begin purchasing fifty million dollars of bitcoins starting next month".  Finally, you run a fake story claiming that both Amazon.com and Walmart will begin accepting bitcoin as payment starting tomorrow.

This is called "pumping".  You are lying, and fraudulently spreading false information with the intention of increasing the exchange rate.

All this fake "news" over the course of a day or two causes many people who are afraid that they might miss out on an opportunity to purchase as much bitcoins as they can afford. It probably even causes some to purchase more than they can afford.  All this purchasing as caused the exchange rate to increase significantly.  In another day or two, people will begin to realize that CNN was lying.  Other news stations will interview Bill Gates, Amazon.com, Walmart, and Warren Buffet.  Once people all realize that the stories were all lies, the exchange rate will come crashing back down as many people sell of the bitcoins that they have as fast as possible.

Realizing that your lie will only push the exchange rate high for a short time, you quickly sell every all the bitcoins you have very shortly after running your fake news stories.  This sell off while knowing that the exchange rate is artificially high is called "dumping".  You are essentially "dumping" a bunch of trash into the hands of those who don't yet realize that they've been fooled by your lies.

pump-and-dump isn't illegal because of the "free money" that comes from buying low and selling high.  pump-and-dump is illegal because of the fraud that is involved in trying to falsely convince people that something is about to be much more valuable even though you know it won't.

[var53]

If you simply buy low, sell high, there is nothing wrong with it. Determining when high is high enough... and low, low enough, is the tricky part.

That sounds like what stock brokers routinely do, and that's not illegal anywhere, as far as I know. Stuff like insider trading s illegal, and no doubt as others have said, intentionally spreading FUD to lower a price.