Richard R_ Baker

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What is a social media pump-and-dump scheme?

Pump-and-dump schemes involve coordinated hype on platforms like Telegram, Twitter, or Discord to inflate the price of a low-cap crypto or stock. Organizers buy early, spread exaggerated claims, and encourage retail traders to buy in. Once prices spike, they sell at a profit, leaving late buyers with heavy losses. These schemes are illegal in traditional markets but harder to regulate in crypto. Red flags include promises of “guaranteed moonshots” and sudden viral promotions. Traders should avoid speculative groups pushing anonymous coins.