Crypto glossary
Pump and dump
A pump and dump is a manipulation scheme in which promoters inflate the price of a thinly traded asset with hype, then sell their holdings to late buyers.
In a pump and dump, a group quietly buys a low-liquidity asset and then promotes it aggressively with exaggerated claims, coordinated posts or paid endorsements. As new buyers rush in, the price rises. The organisers sell into that demand, the price collapses and the late buyers are left with the losses.
Crypto has been a frequent target because thousands of small tokens trade on lightly regulated venues with little liquidity. Schemes have been coordinated through Telegram and Discord groups, influencer promotions and newly launched memecoins whose creators hold a large share of the supply. US authorities have brought both civil and criminal cases against organisers of crypto pump-and-dump schemes.
Warning signs include sudden price spikes with no news, heavy promotion urging people to buy immediately, anonymous teams and a supply concentrated in a few wallets. In most jurisdictions organising a pump and dump is illegal market manipulation, and buyers who arrive after the spike rarely recover their money.
Example
A Telegram group might announce a coin at a set time, pushing its price up 300% within minutes; an hour later the organisers have sold and the price is back below where it started.
