Inside A Crypto Pump & Dump Organization, Part 1 - The Setup + Discord Invite Links For The Inquisitive & Foolhardy!

in #cryptocurrency7 years ago (edited)

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It's almost that easy.

If you have a pulse, you're probably aware that the cryptocurrency markets are well known for one outstanding feature in particular - volatility.

Unfortunately, cryptocurrency is starting to get a reputation for the "wrong" kind of volatility, and the government may yet again be "here to help."

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Didn't even have to type in crypto, Google knew what was up.

What contributes to volatility under normal circumstances? Well, truthfully a number of things that cryptocurrencies have do. Rapidly expanding markets based on new technology are inherently volatile, especially one so regularly fraught with regulatory peril as cryptocurrencies are. On top of that, thinly traded markets with slim order books and low market cap assets create a perfect brew for facilitating volatility.

However, there is another source that is definitively affecting the market you might not be considering - organized trading groups, typically derisively referred to as "Pump & Dump" operations.

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Technically, this appears to be legal as cryptocurrencies are considered "property" not "securities". (US)

Typically, one can pump a stock either by distributing "information", or with overwhelming volume. The operations I'm aware of in the crypto-sphere are mostly engaged in the latter.

The way these groups work is that a signal goes out to all the members of the group to purchase the same thinly-traded alt-coin at a major exchange. Times are chosen to maximize impact from members being present and market activity. Usually, Binance is the popular target as they have a functional interface that includes the option to buy and sell at market, something that is surprisingly missing from some other major exchanges such as Bittrex, and is borderline mission-critical when attempting to execute fast trades in a suddenly clogged market.

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An example of a bot-hardened Telegram signal, which is often used due to an ironically lower latency than Discord.

There are two types of pumps, ranked and unranked. In an unranked pump, the signal theoretically goes out to all members at exactly the same moment, and the battle for gains comes down to speed in trade execution, latency, etc. In a ranked pump, the signal is time-delayed to different groups of users based on their contribution to the Discord group (generally in the form of users invited). The competition is fast and furious either way, as the advantages given are measured in halves of seconds.

Results can be impressive, painting 1m candles showing gains as high as 50%. The gains are given back just as quickly, with the market typically equalizing to very near the original price. Unless you are very fast and early, you may end up a bagholder.

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Both of these candles were separate pump-group operations.

Below, I'm going to paste a series of links to the various Pump groups I've been invited to. I'm going to be very clear here and say I DO NOT ENDORSE ANY OF THESE GROUPS. I provide the links so that anyone interested in how these groups operate can do their own investigation. If you follow any trades from these groups, which I explicitly suggest you NOT do, you are at your own risk.

Note that following these links to join these Discord groups actually helps me bring additional information to my readers, as they employ a ranking system based on # of users invited which cordon off access to channels based on how much you have promoted the group. It is very difficult to determine who is profiting from these operations without access to the early-information channels for promoters, but as I stated before, I am not trading pumps and do not intend to.

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The cred and chat access from accepting the discord links do help my research.

  1. First, the group noted in my expose above, "Mega Pump".
  2. Second is "International Pump Industries"
  3. Third is "Fair Organized Pumps".
  4. Fourth is "Fair Pumps". I'm noticing a trend of overcompensation here.
  5. Finally, we have "Ultimate Unranked Pumps"

AGAIN, THESE LINKS ARE ONLY SUGGESTED FOR OBSERVATION/CURIOUSITY. TRADE AT YOUR OWN RISK. I DO NOT SUGGEST TRADING PUMPS.

As you can see, much like an earlier, unregulated stock market there is no shortage of these trading groups to be found.

Stay tuned for part 2. I'll discuss the several pumps I have directly observed in real time, which paints a critically different pictures from the conclusions you might draw if you only checked the results charts. The results that these are not money printing operations for most of their users may surprise you.

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