[portofmanteau]

There are groups set up on discord and telegram announcing medium-volume coins to pump to 30k+ followers. The mods announce when a pump will be starting and what exchange without announcing the coin - once the coin and target price are announced, these coins pump up to 3x+ within a span of minutes, and then drop again.

Example - DGD pumped on Binance yesterday:

   

DGD's pump was announced with a target price of .034 - it went from .0137 to .081 and dropped again within a 5 minute span.

The groups I've seen use tiers on discord, where, depending on how many invites you have given out, you receive the announcement slightly quicker (a difference of up to 3 seconds). I do not believe telegram is set up for the same tiers, as it does not use channels.

By definition, it's a ponzi scheme - with the idea that the more people who join in on the pump, the higher and faster the price will go - but those joining later will just be buying up the coins that the higher ranked affiliates are selling.

However, since these groups have 30k+ members, it seems to be enough volume to attract other traders and bots. Additionally, since binance allows market buys, it looks like there are enough people desperate to get in on the pump that they buy well above the announced target price.

Is anyone here following these groups?

[Ethan Hunt]

I used to play an online game that had "Merchant clans" they were a scam where a number of the leaders would bulk buy an item then announce it to the clan members would would then buy back what the leaders bought. The leaders ran off with huge profits and the whereas the late comers to the party would be out of pocket. I'd avoid such schemes. By all means invest in currency but putting blind faith in the integrity of the individuals running such scheme is a risk I'm not willing to take.

I myself would rather flip coins for smaller gains that become involved in such a scheme as the one in your post.

[Ocelot]

(01-10-2018 02:49 PM)Ethan Hunt Wrote:  

I used to play an online game that had "Merchant clans" they were a scam where a number of the leaders would bulk buy an item then announce it to the clan members would would then buy back what the leaders bought. The leaders ran off with huge profits and the whereas the late comers to the party would be out of pocket. I'd avoid such schemes. By all means invest in currency but putting blind faith in the integrity of the individuals running such scheme is a risk I'm not willing to take.

I myself would rather flip coins for smaller gains that become involved in such a scheme as the one in your post.

I think 90% of the speculative altcoin mania is being driven by millennials who played Runescape as kids. It's like "frogposters" and "niggas with anime avatars"—underestimate them at your peril.

But seriously, if there's one thing the hours I wasted on Runescape back in the days of 240p YouTube taught me, it's don't participate in these schemes unless you're one of the people organising it.

[Ethan Hunt]

(01-10-2018 03:09 PM)Ocelot Wrote:  

(01-10-2018 02:49 PM)Ethan Hunt Wrote:  

I used to play an online game that had "Merchant clans" they were a scam where a number of the leaders would bulk buy an item then announce it to the clan members would would then buy back what the leaders bought. The leaders ran off with huge profits and the whereas the late comers to the party would be out of pocket. I'd avoid such schemes. By all means invest in currency but putting blind faith in the integrity of the individuals running such scheme is a risk I'm not willing to take.

I myself would rather flip coins for smaller gains that become involved in such a scheme as the one in your post.

I think 90% of the speculative altcoin mania is being driven by millennials who played Runescape as kids. It's like "frogposters" and "niggas with anime avatars"—underestimate them at your peril.

But seriously, if there's one thing the hours I wasted on Runescape back in the days of 240p YouTube taught me, it's don't participate in these schemes unless you're one of the people organising it.

Your point in bold is crucial. These schemes are exactly like those ones but without the 4 hourly capped trade limit.

[Roosh]

Are these groups legal?

[Ocelot]

(01-11-2018 11:31 AM)Roosh Wrote:  

Are these groups legal?

Interesting question: I'd like to hear what some of the lawyers around here have to say. Could it constitute fraud? How would you even "prove" that someone was running such an operation with crypto?

[ClintTalks]

Wouldn't consider them being legal.

[superschalk]

I played a little bit with these groups last year. Even wrote a script for Bittrex to buy the coins quicker once they are getting announced on Telegram. But the problem was the owners of these groups got in much earlier. As a normal member most of the time once you bought you could only make a few % or in some cases even lost or ended up holding bags of some shitcoins.

Also this can be only done with very small positions. If you would do this bump on low volume coins with a huge position you will most likely lose big time because you would basically need to buy the whole order book and might end up having a higher average price than the actual pump was.

Is it legal? Well it is a grey area i would say. But is it illegal if some whales organize to pump or dump a coin over a couple of days?

[portofmanteau]

Risks:

As superschalk pointed out, pumps are planned days in advance, giving ample time for the organizers to buy moderate amounts of the coins without significantly raising the price. The slower members of these groups are the ones buying the organizers and faster members sells, which is why I called them a ponzi scheme in the OP.

The entire initial pump and dump cycle happens within one minute. Binance's web site is pretty slow, so as superschalk suggested, one would ideally script their *limit* buy and sell orders (Binance's API is pretty good and they have wrappers for plenty of languages) and send them with a short delay. Setting a market buy could see you buying 3x above the target price and you'd be stuck with an extremely unfavorable position.

New speculators in cryptocurrencies should stay far away from this stuff. But the bitcoin threads on here are 5 years old now.

[HighSpeed_LowDrag]

(01-11-2018 12:51 PM)Ocelot Wrote:  

(01-11-2018 11:31 AM)Roosh Wrote:  

Are these groups legal?

Interesting question: I'd like to hear what some of the lawyers around here have to say. Could it constitute fraud? How would you even "prove" that someone was running such an operation with crypto?

IANAL, but if the main selling point of cryptocurrencies is that they exist without any government regulation whatsoever, why wouldn't it be legal to conduct pump-and-dump schemes like this?

[ClintTalks]

(01-11-2018 01:12 PM)superschalk Wrote:  

I played a little bit with these groups last year. Even wrote a script for Bittrex to buy the coins quicker once they are getting announced on Telegram. But the problem was the owners of these groups got in much earlier. As a normal member most of the time once you bought you could only make a few % or in some cases even lost or ended up holding bags of some shitcoins.

Also this can be only done with very small positions. If you would do this bump on low volume coins with a huge position you will most likely lose big time because you would basically need to buy the whole order book and might end up having a higher average price than the actual pump was.

Is it legal? Well it is a grey area i would say. But is it illegal if some whales organize to pump or dump a coin over a couple of days?

Fair point about whales.

[CleanSlate]

It’s not technically illegal... yet. But is it right? I don’t think so.

[britchard]

If any group/business relies on its users to recruit more people in to the group for potential financial incentives, it's a pon.. sorry, multi-level marketing scheme.

Don't go anywhere near these sorts of groups, they're run by a small number of guys who actually make money, then the hordes who at most make a couple of %.