Is pump and dump illegal in crypto?

Nope! Cryptocurrency still remains largely unregulated and since the SEC does not class Etherium-like cryptocurrencies as a security, that means anything goes.

Who organizes them?

Groups of investors found mostly on Telegram and occasionally on other social platforms like Discord, WhatsApp, Twitter, and Facebook.

Say you wanted to start your own, how does a crypto pump and dump work?

It is a six-step process.

Step one: find a low cap asset and begin accumulating tokens over time. Make sure to do this slowly or you could cause a premature spike in the price.

Two: convince a group of investors of your plan. Whisper of riches beyond their wildest dreams and once you know they have been hooked: tell them to wait on buying the asset until you make the call.

Top tip: don’t tell them you bought a sh*t load already.

Three: gather people until there is enough buying power to move the needle. Most coins will not take much to manipulate.

Ready… GO.

Four: make the call. Tell your investors to buy the asset, that will cause the price to explode.

pump

For maximum effect: spread word of the rallying coin across other crypto communities to help inflate the price further.

Five: sell all of your holdings. Others will follow on in a panicked rush— triggering a complete crash of the price.

… and dump

Six: while some walk away with profit, others stare in confusion at their worthless bags. Meanwhile you’ve made a quick getaway.

Luckily, there is a way you can get involved without having to run an elaborate scam group.

What if you want to participate, but don’t want to start it yourself?

Start by joining a couple of pump and dump Telegram groups — you can find some of them here: https://safetrading.today.

Great, that you’re in them, keep an eye on the feed. Suddenly out of nowhere people will start shilling assets with a low market cap.

Boom, the game is on. Open up the graphs and chances are you will see that asset has started rallying hard.

Let’s look at an example

REQBTC had a massive pump and dump few weeks ago.

November 5th, 9:00 am — the call was made and the pump began.

Organizers shilled the asset across hundreds of online communities causing the price to rapidly increase.

shilling REQBTC

Seeing an opportunity to enter, I pull out my phone.

The strategy

1 Buy, 5 Targets and 1 Trailing Stoploss. Simple but effective.

Here is what that strategy looked like before I entered the pump.

Signal: before confirming the trade

In case you don’t know, this is Signal: It makes following strategies like this a breeze and allows you to do things which would otherwise be impossible to do on just the exchange.

Many tools exist to help you automate your trading strategies, but I use Signal. It’s fast and easy to use. If you want to check it out, I’d appreciate it if you’d use my link. Thanks!

… Back to the example. I entered a position at 126 sats with an investment size of $1,000.

Skyrocketing, REQBTC reached 160 sats within the first minute and triggered my first Target. Less than 3 minutes later, Targets 2, 3 and 4 have also hit. I was at 61.2% ($612) total profit.

Target 5 never hit, but that’s not too bad. When the price fell it triggered my Trailing Stoploss — selling my remaining balance for a profit.

The beauty of a Trailing Stoploss…

Using a Trailing Stoploss during a pump and dump is honestly like having superpowers.

With a trailing deviation of 10%, I was already guaranteed to leave with a profit from the moment the price crossed 138.6 sats — the breakeven point.

Triggering at 341 sats (~10% lower than the peak), I walked away with a 170% profit on my remaining $100 left to be sold.

All in all, I left with a grand total of $872 profit. Nice.

In conclusion

It involves quick reflexes, automation and a little luck, but you can make more in 30 minutes than most traders do in a month. They’re addicting too. Once you’ve tried one you will wonder how you ever lived without them.

Over my years of trading, I have never found a tool simpler to use or as enjoyable as Signal. I trade mostly on mobile too, since an opportunity to trade could happen at any moment, it is very convenient to have Signal with me wherever I go.

I should also mention that, as a Canadian 🇨🇦, I also trust them more. Knowing that they are based out of Kitchener, Ontario makes me feel more comfortable about connecting my API keys more so than any other automation tool I have tried, besides, we Canadians do like to stick together.

If you learned something new today and are interested in signing up for Signal then I would really appreciate it if you could use my referral link — it won’t cost you a cent more and will help me stay caffeinated as a I write these articles!