According to a study published on August 5, the Wall Street Journal Manipulation of cryptocurrency is carried out mainly by trading groups that are organized using services such as Telegram.
After the WSJ discovered the results of the research performed on cryptocurrency markets, the WSJ mentioned that synchronized pump and dump schemes have witnessed how traders have lowered and inflated the prices in this year for various cryptocurrency.
As a result, it is alleged that such groups generate hundreds of millions of dollars of income for themselves, while others suffer losses after groups massively sold a particular asset.
Only in the first six months of 2018, the trading groups managed to create revenue of $825 Million.
WSJ looked at 175 schemes of 121 selling various currencies, stating that more of such groups exist, adding millions of them potentially in the operation. It also stated that in private conversations works by invitation only, they are generally open under the supervision of an anonymous moderator.
As an example of the commercial group’s behavior, the WSJ took an old alt coin, Cloakcoin that has seen multiple price surges in the present year.
A sudden surge in growth on July 1 on Binance crypto exchange was the result of a trading group called the Big Pump Signal, stated WSJ.
The price of Cloakcoin rose on Binance shortly after Big Bomb Signal circulated a message through Telegram to followers which promoted the purchase of crypto, according to the study.
The best-selling and top-traded bitcoins pair of Binance were hardly affected during the Cloakcoin pump operation.
The results added another dimension to the market manipulation theories that the crypto-currency markets have surrounded in recent months.
For bitcoin several sources have said about factors like Mt. GOX sales and large volume holders have carried a practice of artificial price fluctuations to record highs in December 2017 while others stated that such activities didn’t affect markets.