best ico to invest

Crypto Exchange to Pump Random Coins

in News by

Cryptocurrency exchanges are making headway in improving the penetration of digital currencies, but few have the popularity that Bitcoin enjoys. According to CCN, YoBit is looking to use unconventional methods to drive up the number of traders on their platform. The plan is to randomly pump coins with the intent of driving up their prices. The exchange based in Russia said that it would inject 10 BTC which is equivalent to $66,000 into ten random markets. 

blockchain

In a tweet, YoBit plans to buy one random coin for 1BTC every 1-2 minutes, ten times. This is a drop in the ocean given that the global cryptocurrency market records $12 billion in daily trading volume. However, this will lead to a massive increase in prices of microcap altcoin markets that do not get much trading. 

While many Twitter users thought that the YoBit account might have been hacked, the report seems to be true. Their website has a countdown timer to the self-described pump, which means that they are serious about pumping up coins. 

Market Manipulation Ploy

Early on in the year, the US Securities Exchange Commission issued a customer advisory warning against such kind of pump-and-dump schemes and warned that they are illegal. While it remains to be seen if YoBit’s action is unlawful according to the SEC definition, the move is being heralded by many as a form of market manipulation. 

According to the US Commodity Futures Trading Commission chairperson, J. Christopher Giancarlo, the CFTC is focused on combating fraudulent forces that seek to manipulate the cryptocurrency markets. In a Wall Street Journal report, CFTC has seen a significant increase in civil penalties in 2018. In the current fiscal year, CFTC has issued $900 million worth of penalties, which is larger than the amount levied in five out of eight years of the Obama administration combined. 

CoinMarketCap currently ranks YoBit as the 51st largest cryptocurrency exchange in the world as per their adjusted daily trading volume. By the time of writing this article, YoBit had processed $19 million across 482 markets in the past 24 hours and more than $198 million over the past one month. The news come after a vast majority of cryptocurrencies closed the market on Wednesday at a loss. It is estimated that the market lost an estimated $13 billion with bitcoin leading the pack. 

Pump and Dump Schemes

According to the Wall Street Journal, pump and dump schemes are on the rise and YoBit seems to be riding the wave too. The report by the WSJ claims that the operator of the scheme benefits the most and traders get anything from pump and dump schemes. It is thought that the allure of involvement keeps traders coming back. Big Pump Signal, a chat room with more than 74,000 followers on Telegram, initiated 26 pump operations that raised $222 million in December 2017.

crypto

YoBit announcement to randomly pump certain coins to increase their value borrows heavily from the pump and dump schemes model. A Business Insider investigation in November 2017 on pump and dump schemes revealed that there were traders conducting pump and dump schemes on YoBit via Telegram. It is not clear whether the YoBit team is aware of the activity on their platform, but their latest news does not help their cause.

Kayla is an adept article writer with vast hands-on experience in cryptocurrency and technology. She is outgoing and always looking for new challenges to conquer. Over the years, she has gain massive traction online for writing stellar content on cryptocurrency and blockchain technology in a crispy and easy to understand style. When she is not writing for the web, she loves spending quality time with friends, colleagues, and her family indoors and outdoors. Be sure to check out his profile online for more invigorating articles.