Celebrities and influencers are increasingly being accused of being involved in Crypto pump-and-dump schemes. However, they propel token prices in order to earn profits after selling their stakes, they cause huge losses to the followers they inspire.
Lil Pump and Moneybagg Yo are some of the popular celebrities who have invested in these scams. Both promoted numerous tokens in ether-scammed fashion, only to sell what they had pumped.
Lil Pump even had his crypto in the form of $PumpCoin and similarly Moneybagg Yo with $SpeakCoin. From the study that ZachXBT conducted, both celebrities sold their massive stakes in the tokens after which their promotions started, decreasing the overall token prices plus the investors’ losses.
Trolling seems to have been occupied by some notable internet personalities including the famous YouTuber, KSI. ZachXBT’s investigation found that KSI endorsed tokens, such as XCAD and Ethernity Chain (ERN) in his social accounts, then dumped them and made nearly $1. 2 million.
Even though KSI blamed the poor investment decisions and lack of malice, many people, including Coffeezilla, were sceptical of KSI’s actions and considered it as a pump-and-dump scam strategy.
Influencers and Pump-and-Dump in Cryptocurrencies
Pump-and-dump strategies involve impersonators who help in the marketing of certain currencies through their large followership. Most of them take to social media pages to popularise these tokens, with exaggerated claims on how valuable the tokens will be. This artificial hype raises the value, and followers hurry to invest.
These are the basics of how it works; once the price eventually reaches a high they cash out making the price drop and their followers are left with almost worthless coins. This indeed encourages fraudulent activities and erroneous manipulation that once again leaves individual investors at the receiving end while eroding faith in cryptocurrencies generally.
These have raised much concern and demand for celebs and social media personalities, who have huge followerships to be more accountable and responsive. Regulatory authorities need to watch and prevent such manipulative wrong practices on vulnerable investors in the unpredictable environment of the crypto market.
Also Read: $3 Million in Lost Bitcoin RECOVERED! Researchers Hack 11-Year-Old Crypto Wallet
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