Paper by American and Israeli researchers looked at the proliferation of frauds using tactic long known by the financial markets, called ‘pump and dump’ scheme. They looked at the unofficial channels on Telegram, Discord, and other messaging app groups that sent the false informations; so called ‘pump signals’. Emergence of nearly 2000 cryptocurrencies in 2017, created the place for the known financial swindlers and other unethical players to take the advantage of unregulated markets and online exchanges. Research recorded more than 3500 ‘pump signals’, concluding that ‘pump and dump’ schemes are widespread in cryptocurrency market. This can be a strong signal for regulators to try impose the rules common in other financial markets.
The digital currencies story is a continuation of the long-running saga of economics, markets, and commodity exchange in human society. With the constant rise of the global network, we have witnessed many global services becoming widely accepted and in a way changing (by adding to) our experience of mutual interaction.