Vitalik Advisor To The Board Of Small Cryptocurrency

Vitalik advisor to the board of small cryptocurrency

The US CFTC (Commodity Futures Trading Commission) released a customer advisory warning traders about bitcoin and cryptocurrency pump and dump groups.

Vitalik advisor to the board of small cryptocurrency

Commenting on the same, the Ethereum funder, Vitalik Buterin also cautioned traders and investors about the groups which promise higher returns with moon schemes.

There are many social media groups on Facebook, telegram and Twitter, which offer Pump-and-dump schemes to traders and investors.

They take advantage of hype factor and thin liquidity to form sudden spikes in the virtual currencies market.

Such schemes are not new since they were integral part of penny stocks trading as well in the stock market. This concept was adapted in the virtual currencies, bitcoin and digital tokens world as well.

How Bitcoin and Cryptocurrencies Pump and Dump Schemes Work?

As I said, the idea is not new.

Vitalik advisor to the board of small cryptocurrency

It was and it is till date used in the stock market as well. There are groups who create false rumors, promises and news about a small cap stock or penny stock.

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It results in sudden hike in the demand, which leads to higher prices.

In short, hype is created, stock price is pumped and when prices are high, all traders sell or dump the stock.

Similarly, in the bitcoin, cryptocurrencies and digital token, groups create fud, hype and fake promises to create a pump-and-dump scenario. Prices shoot suddenly and people sell at higher prices.

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All this happens within a matter of minutes and most of the traders are not aware what happens in the background.

CFTC Customer Advisory Regarding Virtual Currency Pump-and-Dump Schemes

In a customer advisory, the US CFTC (Commodity Futures Trading Commission) warned customer and traders not to fall in trap of the Pump-and-dump schemes.

They cautioned customers against the groups having thousands of members with fake promises of words like ‘moon’, ‘pump’, ‘quick money’ and ‘high returns’.

The advisory board also gave a few examples of messages being circulated in such groups:

“15 mins left before the pump!

Vitalik advisor to the board of small cryptocurrency

Get ready to buy”.

“5 minutes till pump, next message will be the coin! Tweet about us and send everyone. Let’s take it to the MOON!!!!!”

Such schemes and methods occur in the widely unregulated cash market for cryptocurrencies and digital tokens.

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The CFTC cautioned traders that they have received many complaints from many investors about losing money in such schemes.

The board also advised the top bitcoin and cryptocurrencies exchanges to take measures to prevent such schemes.

It is important to note that exchanges such as Bittrex already closed many accounts, participating in these schemes.

Earn Monetary Reward Between 10 to 30 Percent for Informing Pump-Dump Schemes

The CFTC board has announced a monetary reward to anyone who informs them about such groups.

If you have original information that can lead to monetary sanctions more than $1 million, then you can get rewards between 10 percent and 30 percent.

For more information and to submit a tip, you can visit the CFTC’s website.

Vitalik Buterin Warning against Moon Schemes

The Ethereum founder, Vitalik Buterin, in a tweet mentioned about the CFTC advisory statement.

He stated about bounties for whistleblowers on pump and dump groups now.

In short, he cautioned investors and bitcoin traders to not purchase virtual currencies based on social media tips or sudden price spikes.

A good investor and trader should always do thorough research before investing into any cryptocurrency and digital tokens.

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The math is simple and similar to the stock market trading. You study about a company and then invest accordingly.

Vitalik advisor to the board of small cryptocurrency

Similarly, you should study companies in the virtual currencies world and make a sensible decision.

Stay away from such fraud schemes guys and do not fall into quick money making schemes. Trade safely.

Cryptocurrency Trading, Digital Currencies, Virtual Currencies, Vitalik Buterin

Vitalik advisor to the board of small cryptocurrency