Every few days, 200,000 strangers come together online to buy little-known cryptocurrencies, also known as altcoins, at exactly 2 p.m. Eastern time. Then, anywhere from 30 to 120 seconds later, they sell them en masse (or at least try to). Those who buy and sell at the right time can potentially make out like bandits.

Welcome to the wild world of altcoin “pump groups,” where participants believe they are the wolves, but they’re actually probably the sheep.

“Pumping is the process through which a large group of people agree to buy a certain coin at a particular time,” reads the welcome messages for The Alt Pump, a pump group based in the messaging app Discord that has more than 30,000 members. “With this group, you will have large amounts of people buying a coin at the same time. This will pump the price straight up. After this the dumping part comes in. After the price rises tremendously up because of the pumping, we start selling at a good profit. This is called dumping.”

Cryptos aren’t a pump and dump scam... ignore this Facebook ad that *literally* asks you to pump and dump cryptos. 🤣 #CryptoNews#cryptocurrenciespic.twitter.com/nCVoSqOJqD — Stephen Punwasi (@StephenPunwasi) January 18, 2018

The pump group ethos is simple: Buy low, sell high. The implication is that investors outside the pump group will see the rapidly rising price and rush to buy in, anxious not to miss the next Bitcoin-style gold rush. But the reality is a bit more complex.

Instant, easy wealth is always the founding principle of a pump group, whether it’s presented in terms that seem reasonable, like “at least a 300% return on your investment,” or ridiculous, “[GET] READY FOR A FUCKING LAMBO” (both of which are actual messages sent in groups). These groups are promoted heavily on Facebook, Instagram, and Twitter as both ads and general posts, but they almost exclusively operate on semi-anonymous messaging services like Discord and Telegram.

The whole scam works like this: First, an organizer grows their group to an acceptable size (2,000 seems to be the minimum, based on member-hungry Discord and Telegram posts) through promotion and by spamming join links. Next, they will find an unheard-of coin and direct everyone to buy it, driving the price up. Commonly called altcoins (or less politely, shitcoins), these alternative cryptocurrencies are easy to make and generally worthless. The organizer sets a “target price,” and then it’s basically a free-for-all, as participants decide on their own when to sell.

I spent a day lurking in 12 of these groups ranging from large (Big Pump Signal, 200K) to small (Cali Pumps, 2K) and chatting with their members. In most established groups, the pumping process itself is surprisingly well-organized. Group leaders provide specific instructions to their members that include the exact time a pump will occur (translated into multiple time zones), what exchange the pump will take place on, what the “target” inflation price is, how the pump signal will be provided (some groups say they use images instead of text, to counter bots), and a number of other helpful tips and tricks. As it grows closer to pump o’clock, organizers will send out a flurry of reminders and inspiring messages in order to, well, pump up the troops.

A screenshot of messages in Big Pump Signal’s Telegram channel from January 20.

After the pump signal is given, group members flood the chosen exchange, buying up as much of the coin as they can for cheap. Members are also expected to promote the coin on social media in order to create buzz around it, which is intended to attract new investors to the currency. As BuzzFeed reported, members of these groups sometimes even create fake celebrity tweets or fabricate news stories in order to affect the price of a coin. Members are instructed to “dump” the coin — meaning, sell it as quickly as possible — once the coin reaches a preset “target” price, in order to make a profit, however, the market usually collapses long before then due to panic and general volatility.

Two of Big Pump Signal’s most recent pumps are good examples of how the whole scheme works.

Chart of GVT activity from 1/13/18-1/14/18

Chart of BNT activity from 1/20/18-1/21/18

On January 13, Big Pump Signal announced the pump of the day would be GVT, a four-month-old Russia-based altcoin created by an apparently product-less company called Genesis Vision. All of Big Pump Signal’s take place on the cryptocurrency exchange Binance.

Thirty-four seconds before the pump signal was given for GVT in the general chat room, the coin was trading for approximately $29.22, according to data collected by CoinMarketCap. Almost immediately afterwards, it began to rise in value. Four minutes and 16 seconds after the pump signal, it was at $35.05, and at nine minutes and 16 seconds post-pump-signal it had reached its peak at $45.41. Anyone who invested immediately and dumped right at the peak could have potentially earned a 55.51 percent return on their investment. In other words, if a participant invested the equivalent of $1,000 immediately after the signal dropped and happened to randomly guess when the peak would be and sold exactly then, they would have made $1,555.10 (minus the .1 percent trading fee charged by Binance and any fees for withdrawing their money from the exchange). This is about the best case scenario you can hope for, but it’s an unlikely outcome for the average investor.

The group’s pump of BNT — an altcoin created by the B protocol Foundation in June 2017 — turned out a little differently. Forty-six seconds before the pump signal was given, BNT was trading at $7.91, according to data collected by CoinMarketCap. At its peak, four minutes and 15 seconds post-pump-signal, BNT was only trading at $9.67, and then quickly plunged back down into oblivion, meaning the highest possible earnings were around 22.25 percent. That means if a participant bought $1,000 worth of BNT as soon as the signal dropped and and somehow knew to sell four minutes and 15 seconds later at the peak, they would have made $1,222.50 (minus the .1 percent trading fee charged by Binance and any fees for withdrawing their money from the exchange).

“Eighty to 90 percent of the people lose and they'll probably think, ‘Oh I just I just waited too long to sell it. I could just do it again. Let me try it again,’” said Chris Koerner, an altcoin expert and veteran cryptocurrency trader, in a phone interview. Some organizers charge a fee to participate in the pump — which can be anywhere from $10 to $1,000 — meaning they’ll make money regardless, while most of the members are essentially just gambling. “And it becomes this addiction: You just keep losing money until you don't have any left, and the organizer makes out like a bandit, because not only is he profiting off buying it before anyone else, but he's charging people for the group.”

Tiered access to the pump signal (a.k.a., the message that lets everyone know which coin to buy) seems to be the norm for most groups. Users are generally assigned ranks based on their participation in an affiliate system, or by the amount of cash they’ve sent to an organizer in order to obtain a “premium” membership. High-ranking members may be sent the pump signal anywhere from half-a-second to three seconds earlier than the general pool, a disparity the groups advertise openly.

“They are 90 percent a scam to take money and the ones at the top will always win,” said Brad Spann, an active member of a number of the most popular pump groups, over Discord chat. Like most involved in the scam, Spann first heard about the groups through Twitter, but quickly became hooked. “Once I got in a group, people would send me links to other groups to join so they could rank up to get a faster chance at getting the signal for the coin for the pump and dump.”

Here’s how ‘MEGA Pump - Cryptocurrency Investment Group’ — which has over 30,000 members on Discord and 12,000 on Telegram — describes it:

Affiliate System:



The higher your rank the faster you get the signal for the pumps! Ranks are determined by the amount of people that you have invited. Each rank gets the signal faster than previous. The more you invite, the faster you get in on the pump!



1 invite - @Member rank (No time advantage, ability to talk in the chat.)

4 invites - @Representative (0.5 sec earlier)

10 invites - @Associate (1 sec earlier)

25 invites - @Partner (1.5 sec earlier)

50 invites - @Minister (2 sec earlier)

150 invites - @Ambassador (3 sec earlier)

500 invites - @Top Promoter (3.5 sec earlier)

While a couple of seconds might not seem like much of an advantage to an outsider, in the fast-paced world of pump and dump, it makes all the difference. If you don’t buy into the chosen altcoin within the first few seconds of the pump, you’re probably going lose money. The general consensus within the groups themselves is that this is due to bots, which are allegedly used by members to buy and sell large amounts of coin almost instantly. The fact that it is so easy to lose money may just be due to the structure of the scam, however, in which elite members are the only ones positioned to profit.

“A lot of people don't feel that [the tiered system] is fair,” said Spann. “[S]ome groups have thought about changing that and making it free for all pumps and then doing a giveaway or raffle for those who invite more people. In the end th[e] admins of these groups will always want more people in their groups — so they can make more gains on bigger pumps — because they always buy in first because they know the coin they will pump.”

A quick scan of Twitter (or even some of the groups’ own Discord chat channels) will quickly reveal a number of users complaining about losing money. “This wasn’t a good pump,” wrote one in response to MEGA Pump’s January 20 pump of BNT. “When we [received] the notice for the coin it was already at it top [sic]. A lot of people lost money.”

Though the technology for these sort of schemes has been around for years, pump and dump groups seem to have recently skyrocketed in popularity. The popular pump groups I found on Discord and Telegram were created within the last two months, and mentions of pump groups on Twitter and elsewhere from November 2017 and earlier pale in comparison to recent stats. The same goes for mentions of pump-group-related ads on Facebook and Twitter.

Screenshot of a Facebook ad for pump group Altcoin Global.

People may be taking a chance on these obviously sketchy “investment opportunities” out of cryptocurrency-related FOMO. In the wake of Bitcoin’s extremely high-profile year, everyone wants in on the seemingly magical cryptocurrency market. Koerner thinks most people’s utter lack of financial knowledge is also to blame. “I think they don't have any experience in the stock market...and people are exploiting that,” he told The Outline. “I think most people don’t realize [sic] there has to be demand for what you're selling at that crazy price. And if there's not, then the price drops like crazy and you lose.”