CFTC Joins SEC In Warning Against Crypto Pump-and-Dumps

"Customers should not purchase virtual currencies, digital coins, or tokens based on social media tips or sudden price spikes. Thoroughly research virtual currencies, digital coins, tokens, and the companies or entities behind them in order to separate hype from facts," it wrote.

Describing the environment as "old scam, new technology," the CFTC warned that "same basic fraud is now occurring using little known virtual currencies and digital coins or tokens."

The agency also detailed some of the methods by which the pump groups manipulate members to drive prices - often to the benefit of the organizers themselves.

The CFTC wrote:

"Some pump and dumps use false news reports, typically about a famous high-tech business leader or investor who plans to pour millions of dollars into a small, lesser known virtual currency or coin. Other fake news stories have featured major retailers, banks, or credit card companies, announcing plans to partner with one virtual currency or another. Links to the phony stories are also accompanied by posts that create false urgency and tell readers to buy now."

https://www.coindesk.com/cftc-joins-sec-warning-crypto-pump-dumps/