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by coolio222 3222 days ago
A pump-and-dump scheme drives the price up by promoting the commodity only to allow insiders who bought it earlier to sell when the price peeks just before the the price plunges again.

You can easily see it in penny-stocks and/or OTC-stocks. The price stays flat, then peaks, then crashes to about the pre pump-and-dump price.

I haven't seen such a behaviour in any of the new coins. Does anyone have an example or link to a chart?

2 comments

The scammy ICOs (which is most of them) aren't really pump and dumps. They're more like variations of the "big store" and other phony front investor scams. It's more like outright stock fraud. They're selling shares in something that doesn't exist and isn't going to exist.
I think this is biggest difference. Selling things that there is no real intent to actually make the systems. The other issue is that a real company could get sued and you'd be able to track the real assets bought with the ill gotten gains. With these ICOs, I'm not sure how you track the money to even know who to sue.
My understanding of ICOs is that the insiders don't necessarily need to dump, which makes it even better for the pump-and-dump sort of scam.