An Examination of the Cryptocurrency Pump and Dump Ecosystem

The surge of interest in cryptocurrencies has been accompanied by a proliferation of fraud. This paper examines pump and dump schemes. The recent explosion of nearly 2,000 cryptocurrencies in an unregulated environment has expanded the scope for abuse. We quantify the scope of cryptocurrency pump and dump schemes on Discord and Telegram, two popular group-messaging platforms. We joined all relevant Telegram and Discord groups/channels and identified thousands of different pumps. Our findings provide the first measure of the scope of such pumps and empirically document important properties of this ecosystem.

[1]  Moayad Aloqaily,et al.  An incentive-aware blockchain-based solution for internet of fake media things , 2020, Inf. Process. Manag..

[2]  Saif Ullah,et al.  Does it help firms to secretly pay for stock promoters , 2016 .

[3]  Neil Gandal,et al.  Price Manipulation in the Bitcoin Ecosystem , 2017 .

[4]  Ingrid M. Werner,et al.  The Twilight Zone: OTC Regulatory Regimes and Market Quality , 2013 .

[5]  Tyler Moore,et al.  There's No Free Lunch, Even Using Bitcoin: Tracking the Popularity and Profits of Virtual Currency Scams , 2015, Financial Cryptography.

[6]  Carol R. Goforth.  U.S. Law: Crypto Is Money, Property, A Commodity, And A Security, All At The Same Time , 2018 .

[7]  Markus K. Brunnermeier,et al.  Hedge Funds and the Technology Bubble , 2003 .

[8]  Tyler Moore,et al.  Analyzing the Bitcoin Ponzi Scheme Ecosystem , 2018, Financial Cryptography Workshops.

[9]  Rajesh Aggarwal,et al.  Stock Market Manipulations , 2006 .

[10]  Alex 'Sandy' Pentland,et al.  An Experimental Study of Cryptocurrency Market Dynamics , 2018, CHI.

[11]  Juyoung Kang,et al.  Information availability and return volatility in the bitcoin Market: Analyzing differences of user opinion and interest , 2019, Inf. Process. Manag..

[12]  Andrew Urquhart.  The Inefficiency of Bitcoin , 2016 .

[13]  Carlos Guestrin,et al.  The Rise and Fall of Network Stars , 2017, Inf. Process. Manag..

[14]  J. Griffin,et al.  Is Bitcoin Really Untethered? , 2020 .

[15]  J. Kamps,et al.  To the moon: defining and detecting cryptocurrency pump-and-dumps , 2018, Crime Science.

[16]  Eng-Tuck Cheah,et al.  Speculative bubbles in Bitcoin markets? An empirical investigation into the fundamental value of Bitcoin , 2015 .

[17]  Neil Gandal,et al.  Can We Predict the Winner in a Market with Network Effects? Competition in Cryptocurrency Market , 2016, Games.

[18]  Fred Morstatter,et al.  Identifying and Analyzing Cryptocurrency Manipulations in Social Media , 2019, IEEE Transactions on Computational Social Systems.

[19]  Eng-Tuck Cheah,et al.  Negative bubbles and shocks in cryptocurrency markets , 2016 .