What is a Pump & Dump ?

Here is the basic definition of a Pump and Dump scheme according to the Oxford Dictionary : denoting the fraudulent practice of encouraging investors to buy shares in a company , or in our case crypto tokens, in order to artificially inflate the price, and then selling ones own shares while the price is high.

While this is something new to me in the cryptospace, it has probably always been going on. I just never realized it until this recent fiasco with artificial pumping of DOGE coin.

DOGE is known as a meme coin in the crypto community, but it can be used as a utility to transfer fiat. Think of it as a hollow shell that you can fill with your idea, and then use it as vehicle to collect donations, etc. See the image below for an example of DOGE coin in action for a noble cause.

Now the big question, Are pump & dump illegal, can I go to jail ?

According to Investopedia they are Illegal, and anyone caught being involved in this kind of scam can face heavy monetary fines. I can only assume that this is also the case with the cyrpto market. The recent Robinhood / Gamestop situation has sent a wave of new users to the crypto market, and not all of them are good people.

What is this all about ?

What started out as an organic protest against the wall street hedge fund managers to catch them shorting GameStop stocks has migrated into the crypotspace with much fanfare.

The goal was for every average joe to buy DOGE coin as protest against the banks, and to hold on to it as the value increased. It was supposed to be a turning point in our financial evolution where the average world citizen could finally be in total control of their money, and finally be able to make our own financial decisions as individuals.

Sadly, what started out as a great idea has now been co-opted by bad actors trying to take advantage of the masses. Not only are there new subreddits for crypto pumps, they also have Discord, and Telegram channels where they pump their coins.

What these people don't realize is that the bankers watch everything. Did you know the SEC and the US Attorney General are trying to supeno Telegram, and Discord chat threads from the Gamestop Short Squeeze ? I don't know if anything will come of it, but just be aware that you could incriminate yourself just trying to be inquisitive.

The government won't care about your sob story if you get caught "manipulating their markets ". Like I said, this whole pump and dump in crypto is new to me. I never really paid attention to small pumps because my coins are long term investments. I actually thought this was the best approach for me, but I have now realized that was also a mistake.

I will cover that whole debacle in another article. For now I just wanted to get this one published while the iron is still hot on this story.

I have managed to infiltrate a few of these pump and dump groups so I can expose their plans and warn people of what they are planning next when it comes to cryptocurrency.

We have come to far to have some wall street hacks, and get rich quick crypto noobs ruin everything this community has worked for to bring cryptocurrency, and blockchain technology mainstream.

The Lesson I learned :

One other valuable thing I have learned from this situation is that if you are involved in cryptocurrency, that you must follow the world news, and social trends if you do not want to be left behind. Believe me, I don't like following the news either. If you are anything like me, the last thing you want to do is waste time on world news, but it is imperative if you are in cryptocurrency for investment purposes. If you really want to make money in cryptocurrency and blockchain technology the key is to always do your own research.

The wrap up : What can you do to protect yourself ?

Here I will add my personal opinion, so you know where my head is at, and share some advice on how to protect yourself.

I like to put my money into things I currently use, or projects I feel are going to bring something valuable to the world as a whole. I like BCH & ETH as far as a "digital currency" is concerned, and Cardano ADA for the decentralized blockchain it is planning to deliver. I also DCA into BTC as my long term lottery pick.

I will write another article concerning my personal investments. This was just meant to serve as an example for those wondering where I am coming from.

The disclaimers and the other good stuff :

As always, none of this should be considered financial advice. These statements are only meant to document, and share my own personal observations, and experiences.

Taking financial advice from me would be like asking your auto mechanic to do your colonoscopy. Sure, he could probably do it. He has all of the tools to get the job done, but do you really want him to try ? LOL . Im sorry, but that is the best original analogy that I can come up with that might make someone think twice before just looking at this article, and then going out to buy the tokens I mentioned without the proper research.

So what is next ?

This seems to a topic that isn't going away anytime soon. In the meantime always stay vigilant, watch trends in the news, and always do your own research.

One last warning pertaining to the new pumps that you may see this week : I have seen XLM , ALGO , and VET all mentioned. The Algorand team actually confronted them and told them to go away!!! They like to target low market cap, cheap entry point tokens so that they can load up on them before you, and then dump on you when you buy thinking you got some great inside info.

It is disgusting because I hold two of three tokens I mentioned here. I hold VET and ALGO. I don't want to be put in the situation where I may have to sell some of them prematurely due to an un-organic manipulation in the price.

I hope this information helps someone. we have to defend the crypto community from these weasels when at all possible. Good luck to all. You can still participate in this peaceful economic revolution, and maybe even make a few bucks in the process. My only other advice is to be cautious, and remember to always try ,and do what is right. You will sleep better at night. Thanks for reading!

Important Links :

How to identify a crypto Pump and Dump scheme :

https://bravenewcoin.com/insights/how-to-identify-a-crypto-pump-and-dump-scheme

*All images and graphics are created using the free Canva app available on Google Play Store or Apple iOS store using free templates and images from my phone.