Typical process of a Pump and Dump

The authors note that most pump-and-dump activities are coordinated via Messenger Telegram. The initiator(s) first found a Telegram Channel and try to attract as many participants as possible. Xu and Livshits name 1,000 members as a typical threshold to reach before a pump starts. Usually the communication goes only in one direction: Only the organizer is allowed to post in the channel. This distinguishes a telegram channel from a telegram group.

Bitcoin formula Announcement

When enough members have gathered in the Bitcoin formula group, the big waiting begins. The pump organizer or channel administrator first announces the exact time when the pump should take place. The administrator does not reveal which coin it is. Instead, he keeps the group members at the bar with countdowns, motivating words and behavioural strategies until the coin is announced. This usually takes a few days.

Announcement of the Bitcoin trader

At the agreed time, the Bitcoin trader then announces the coin to be pumped on onlinebetrug.de. This is usually done using an image file so that no bots can “read along”. This message means for the members of the channel the signal to buy the token. Through the concerted action, the price of the coin usually rises many times over within a few minutes. During this time, the organizer of the pump summons the members of the channel to still hold their coins so that outsiders can still jump on the alleged moon rocket.

Dump
Already after a few minutes, in some cases even seconds, the price of the pumped coin has reached its peak. At the first sign of a sinking price, the wave of panic selling then begins and the price rapidly plunges to the level before the pump. The initiator of a successful pump and dump is the one who benefits most:

PumpOlymp – Knowing where
In order to get an overview of the pumping activities on Telegram, the researchers fished data from the website pumpolymp.com. The site lists telegram channels dedicated to this form of market manipulation. In this way, the authors identified 220 pump-and-dump activities for the period between 19 July and 18 November this year.