Cryptocurrency News Now!: Over 175 'Pump and Dump' Schemes Identified and Reviewed, A Warning for Traders

Monday, August 6, 2018

Over 175 'Pump and Dump' Schemes Identified and Reviewed, A Warning for Traders

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MARKET

COIN	PRICE	24H

BTC	$6,962.500287	-0.91%

ETH	$406.294735	-0.29%

XRP	$0.423292	-1.54%

BCH	$689.311199	-1.02%

EOS	$6.977001	-0.45%

*Information as of 9:30 AM EST

ANALYSIS

Over 175 'Pump and Dump' Schemes Identified and Reviewed, A Warning for Traders

PUMP AND DUMPS

As the markets continue to be unregulated (for now), the wild west atmosphere of the crypto world is no more apparent than analyzing and reviewing crypto pump and dump schemes
This type of scheme occurs when traders pump the price of a coin artificially by taking advantage of low selling pressure, only to dump on other traders that buy into the apparent price rally
After reviewing trading data from January to July, the Wall Street Journal concluded that over 175 pump and dump schemes have been identified, involving at least 121 different coins

CRYPTO PUMP GROUPS

To coordinate this activity, "crypto pump groups" have been created on popular messaging apps like Telegram and Discord
With over 74,000 followers the largest Telegram pump group is Big Pump Signal
Since inception in December 2017, the group has carried out over 26 pump and dump schemes that have created an estimated $222 million in trading activity

The Wall Street Journal analyzed one of Big Pump Signal's schemes and this was the result just 4 minutes after the announcement:

The two most successful pumps by Big Pump Signal raised the price of coins by over 70% in a short period of time only to dump the price lower than the initial value:

WARNING ALL TRADERS

Sure joining a pump and dump group sounds great in theory, however, majority of traders lose money since the Wall Street Journal found that over 50% of all pump and dump schemes end up with lower coin values than when the pumps were initiated
To illustrate, Taylor Caudle, a trader involved in a Big Pump Signal scheme, lost over $5,000 in 30 seconds and subsequently voiced his concerns on the telegram only to be met with "lol sucks 2 be u"
In addition to losing money rapidly, this type of activity is also completely illegal in regulated markets and it's the type of activity that sent Wolf of Wall Street's Jordan Belfort to jail for 22 months

NEWS

Argo Mining Raises $32.5 Million in First Crypto-Related IPO on London Stock Exchange

ARGO

Argo Blockchain is a cryptocurrency mining platform service that was founded last year, but officially went live on June 11 of this year
Currently, Argo offers Bitcoin Gold, Ethereum, Ethereum Classic, and ZCash mining but is planning on adding additional altcoins to its service
Argo has initiated its operations in Canada and China, but also plans on expanding into more countries

‘NETFLIX OF CRYPTO MINING’

Argo has been dubbed the ‘Netflix of cryptocurrency mining’ because of its subscription service model and emphasis on simple usability

Founder Jonathan Bixby explained the company’s goal:

“We have launched this service to take the pain and heartache out of participating in the biggest new technology breakthrough since the launch of the internet.”

IPO

Argo issued 156 million shares in its initial public offering, which accounts for 53% of the company
The shares were sold for 16 pence which gives the company a market capitalization of $61.2 million

Bixby commented on his company's IPO saying:

"Argo's admission to the London main market is a major step in the company's development and will put us in a strong position to execute our long-term growth strategy. We are delighted with the strong response from investors which will enable us to grow our business in multiple jurisdictions."

NEWS

Venture Capitalist Says That a Bitcoin ETF is Only a Matter of Time

CRYPTO ETFs

Cryptocurrency exchange traded funds have been in the news recently as the Securities and Exchange Commission has been reviewing some notable applications
No company has been able to receive approval from the SEC to set up a cryptocurrency ETF
Investors are anticipating that approval for an ETF will be massive for cryptocurrency investing because it will allow new money to enter the market

VC'S TAKE

Fatfish Internet Group CEO, Kin-Wai Lau, appeared on CNBC recently to talk about cryptocurrency and said that he sees the market entering into a "second wave rally" driven by institutional investors
Lau believes that it is not a matter of if the SEC will approve an ETF, rather only a matter of when

The direct quote from the CEO reads:

“I think it’s a matter of time before we see the SEC approve an ETF. It’s just a matter of which organisation will be able to come out with comprehensive tools in terms of monitoring, surveillance, and ability to liquidity. there is a range of tools that need to be equipped, but it’s also readiness of the market. We’re not far away, maybe a couple of months away from the market accepting an ETF product. I think that’s what the SEC will be looking at.”

PRICE IMPACT

Lau believes that the creation of crypto ETFs or other financial instruments will have a very favorable impact on the price of cryptos

He believes that adoption is driving cryptos price:

“Adoption is what is driving the demand on ground. It’s being used widely in many countries and a lot of jurisdictions are starting to regulate it and approach it with a cautious but optimistic approach. That’s generally a couple of factors that will affect regulatory interest. It is geared up for a rally toward year end.”

EXCHANGE

Germany's Second Largest Stock Exchange Announces "End-to-End" Cryptocurrency Infrastructure

BÖRSE STUTTGART

Börse Stuttgart is the second largest stock exchange in Germany and the tenth largest in Europe, having a trading volume of 81 billion euro in 2017
While Börse Stuttgart is the second largest exchange in Germany by volume, it is the leading exchange for retail investors
In December 2018, Börse Stuttgart acquired Sowa Labs which now acts as a fintech subsidiary for the exchange

BISON APP

Earlier this year, Sowa Labs announced the development of a prototype cryptocurrency trading application dubbed Bison
The app is set to release to the masses this fall and will allow investors to buy and sell cryptocurrency without any fees
At launch, Bison will support Bitcoin, Ethereum, Ripple, and Litecoin, but does plan on adding additional currencies in the future
Bison will also boast features such as an artificial intelligence curated news feed and a tool that will monitor social media to analyze the sentiment of the market
Sowa Labs hopes to make cryptocurrency trading as simple as possible for investors and has developed a simplified user ID verification process

'END-TO-END' INFRASTRUCTURE

In addition to its Bison App, Börse Stuttgart recently announced that it will create an 'end-to-end' cryptocurrency trading infrastructure
One piece of this infrastructure will be a platform for companies to use to raise funds via an initial coin offerings
Also, the company is building a trading venue, creating an exchange where the platform's ICO's can be traded along with other cryptocurrencies
The final piece to the infrastructure is custody services for major investors
This infrastructure is expected to launch this fall alongside the BISON app

MORE BREWING

Jamie Dimon Says JPMorgan Will Use Blockchain ‘for a Whole Lot of Things’
‘No Coffee for Bitcoin,’ Starbucks Clarifies as Media Misrepresent Its New Crypto Venture
Bitcoin Investor Relief As Korean Crypto Exchange Cleared -- But Bears Remain

COIN OF THE DAY

Asch (XAS)
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