Weekly Round-Up #39 | Crypto Pump and Dump: Don't Get Dumped! ????

February 17th 2023?

Spotting Crypto Scams: A Crash Course on Pump and Dump Schemes

At this point, who doesn't know crypto?

Cryptocurrencies have become a global phenomenon and are now ubiquitous. After the bull run of 2021, everyone wanted to get in on the action. Thousands of new projects flooded the space, marketing different utilities; several new blockchains emerged, and venture capital firms and angel investors poured millions into the crypto industry.

The burgeoning crypto market is primarily driven by investors and traders who bet on the values of cryptocurrencies with the expectation of making a profit. But where there's a gold rush, there are bound to be a few vagabonds.

Scammers have been hard at work, inventing technique after technique to defraud the throngs of people hoping to strike it rich through cryptocurrency trading and investment.?

One of the most popular techniques scammers use to exploit legitimate crypto traders is the "pump-and-dump" scheme.?

For those of you who are not familiar with this term, here's a quick rundown. A pump-and-dump scheme is a fraudulent practice that involves artificially inflating the price of a particular cryptocurrency through misleading or false statements, then selling off the assets at the peak of the inflated price. This leaves the unsuspecting investors holding the bag, wondering what just happened to their once-valuable assets.

According to a recent Chainalysis report, nearly a quarter of tokens launched in 2022 exhibited characteristics of pump-and-dump (P&D) schemes. According to the report, over one million tokens were launched in 2022, but only 40,521 received enough traction to be worth analyzing.

Now, I know what you might be thinking: "This sounds like something out of a bad Hollywood movie." Unfortunately, this is a real and ongoing issue in the crypto world. But don't worry, dear readers, for we are here to provide you with some tips on how to spot these pump-and-dump projects and how to stay safu.

First and foremost, do your research! We cannot stress this enough. If a project seems too good to be true or promises astronomical returns, it probably is. Read the whitepaper, study the team behind the project, and check out their social media presence. If something doesn't feel right, trust your gut and walk away.

Secondly, keep an eye out for sudden price spikes. If a project's price skyrockets in a matter of minutes, it's likely that a pump-and-dump scheme is in progress. Don't be tempted to jump on the bandwagon and buy in at the peak. Remember, the only people who benefit from these schemes are the scammers themselves.

Lastly, be vigilant and report any suspicious activities to the appropriate authorities. You can also raise alarms about dubious projects in relevant online crypto communities (Twitter, Reddit, LinkedIn, CoinMarketCap community, etc. By doing so, you're protecting not only yourself but also saving many lives from getting rekt.

The crypto world is wonderful and exciting, full of opportunities and potential rewards. But staying educated and alert is essential to protect yourself from those who seek to take advantage of the unwary. So, keep your eyes peeled, your wallets close, and always remember: stay safu.

Catch up on our published articles for the week!

News

• US Attorneys Propose Tighter Restrictions on Former FTX CEO’s Use of Electronic Devices >>> Read more
• More Argentines Switch to Peer-to-Peer Bitcoin Trading As Inflation Rises in the Country >>> Read more
• Crypto Worth $1.4M Linked to North Korean Hackers Frozen by Binance and Huobi >>> Read more
• Siemens Becomes the First German Manufacturer to Issue Digital Bonds on a Blockchain >>> Read more
• US SEC Moves to Scrutinize Cryptocurrency Custodians >>> Read more
• UK FCA to Act Against Unregistered, Illegal Cryptocurrency ATMs >>> Read more
• Wirex Collaborates with Visa, Strengthening Its Presence in the Asia-Pacific Market >>> Read more
• MetaMask Issues Scam Warning As Hacker Impersonates Namecheap in Unauthorized Emails >>> Read more
• PayPal Ends 2022 With $604 Million in Bitcoin and Other Cryptocurrencies in Its Holdings >>> Read more
• China Announces Plans To Establish a National Blockchain Research Centre >>> Read more

Markets

• 2023 Crypto Regulation Watch: January Recap >>> Read more
• Ethereum (ETH) Market Watch: A Weekly Price Analysis >>> Read more
• Cardano (ADA) Experiences 11% Growth in Two Weeks Leading Up to Shanghai Upgrade >>> Read more

Articles

• Legalism, Ideology and Pragmatism: Unpacking the UK Government’s Crypto Regulatory Proposals: The article covers a range of proposals relating to cryptoassets, including policy objectives, definitions, activities, disclosure, trading venues, custody, lending platforms, and market abuse requirements. >>> Learn More
• Everything You Need to Know About Self-Custody Wallets: This article focuses on self-custody wallets, the recent increase in their use by crypto users, how they currently rank compared to non-custodial wallets, the events and trends that led to this surge, and the prospects for self-custody crypto wallets. >>> Learn More
• Bitzlato Under Fire: The US DOJ’s Lawsuit Explained: This article offers an in-depth analysis of the DOJ’s lawsuit against Bitzlato and its implications for the crypto industry. >>> Learn More

In Other News…

ICYMI: US SEC Accuses Do Kwon of Cashing Out Illegally Obtained $100 Million in BTC Through Swiss Bank

In the world of high finance, where fortunes are made and lost in the blink of an eye, the U.S. Securities and Exchange Commission (SEC) is standing as a sentinel of justice, keeping a watchful eye over the dealings of the crypto elite.?

In a complaint filed on Feb. 16, the SEC accused Terraform Labs, and its founder, Do Kwon, of orchestrating a fraudulent scheme that resulted in the loss of over $40 billion from the crypto market in May 2022.

The regulator alleged that the accused had offered unregistered securities and operated a fraudulent scheme. Further analysis of the SEC filing revealed that Do Kwon and Terraform Labs had transferred over 10,000 BTC into a cold wallet and subsequently converted some of the assets to cash.

Quoting the SEC: "On a periodic basis since May 2022, Terraform and Kwon have transferred- and continue to transfer- Bitcoin from this wallet to a financial institution based in Switzerland and have converted the Bitcoin to cash."

The regulator disclosed that between June 2022 and February, over $100 million in cash had been withdrawn from a Swiss Bank. The alleged fraudsters had cashed out their ill-gotten gains, leaving the crypto market in shambles.

Do Kwon, the mastermind behind the scheme, remains at large, and authorities are on the lookout for him. Acting on an intelligence tip, South Korean officials have made a trip to Serbia, where they believe he may be hiding.

Spotlight on interesting projects?

Goracle

Goracle is the first dynamic, decentralized oracle service on the Algorand blockchain. Goracle’s purpose is to provide simple oracle solutions which assist dApps built on Algorand to access off-chain data securely, accurately, and quickly.? Goracle intends to help businesses, organizations, and users re-imagine how real-time data is directed and exchanged.

Goracle was founded by Abdul Osman who is also the CEO.

To find out more visit their website, join their Discord and follow them on Twitter and LinkedIn.

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