Commodity Futures Trading Commission (CFTC), USA had issued its first warning against Pumping and Dumping. They remarked the entire procedure of Pumping and Dumping as dangerous for the investors. The US Regulator also advised the investors on how to buy cryptocurrency without getting involved in this gamble.
The warning was issued on 15 February by CFTC. The only motive behind this was to warn the investors and crypto enthusiasts to beware of the pumping and dumping cryptocurrency schemes. CFTC also advised the people to avoid being a part of such groups and instruct others also to stay away from them.
Erica Elliott Richardson, the Director of Public Affairs of CFTC said ‘the scam of pumping and dumping is not new in the society and it is not the only one. There are various others as well but the most trending among all currently is this only. It only utilises the technology and focuses to capitalize on the interest of the public to generate digital profits.’
CFTC also mentioned some of the tactics used by the pumps and dumps groups to attract the people towards their fraud. The agency mentioned that ‘the organizers of such groups would initially try to spread rumours about the crypto buying through these groups. Some even use fake news reports which in most probable chances involve a famous business leader or investor. They also employ some fake stories about the person who was benefitted through the scheme. And thus the entire scam is carried with ease.’
To avoid being a part of such a scam CFTC also mentioned few measures an investor must follow to buy cryptocurrency. CFTC said that the customers can protect themselves by purchasing only alternative virtual cryptocurrencies. Even digital cryptocurrencies, coins or tokens can be purchased in order to safeguard their investment. CFTC also collaborated with Securities and Exchange Commission (SEC) and Finra to spread the warning at a larger scale. However, how much will this be helpful for the agency is still unpredictable.