This week a Russian crypto exchange has openly admitted that it’s pumping and dumping cryptos for fun. In a Tweet, YoBit said it will buy one coin every 1-2 minutes for 1 BTC a total of 10 times. This means it will be buying almost $65,000 worth of random altcoins to pump up the price then dumping them to make a sizeable profit. Many exchanges are believed to have taken part in this practice, but none have been so brutally honest about doing it – YoBit even has a countdown timer on its website to the next pump.
YoBit Pump in 22 hrs: https://t.co/RIbW7OhKzM
We will buy one random coin for 1 btc every 1-2 mins 10 times (total buy amount – 10 btc).— Yobit.Net (@YobitExchange) October 10, 2018
Traders Trying to Get Ahead
In the buildup to the YoBit pump, traders were trying to guess which coin would be pumped first. In a flurry of buys to diversify their chances of striking it rich traders flocked to LIZA, YOTRA, BSH, and SATO – all of which saw increases of more than 80% in the hours running up to the pump. These are four very specific coins that had been quite quiet in terms of trade volume up until YoBit’s announcement, this could indicate that the pumps aren’t going to be random and someone leaked inside information.
Illegal Trading to the Max
No matter how you cut it, pumping coins and then dumping them is illegal – its market manipulation. It’s the sole reason behind the US Securities and Exchange Commission (SEC) turning down nine applications for Bitcoin ETFs. Market manipulation has been to blame for December 2017’s huge price spikes in all cryptos and Tether was at the core of those allegations. Allegedly, every time a new batch of Tether was printed, the Bitcoin price would shoot up, but thankfully the company was cleared of any wrongdoing following an external audit. YoBit is technically breaking the law and could face severe consequences for its actions and traders that took part could also be brought in on charges of market manipulation too.
Traders Gambling Their Cryptos Away
In the runup to the pump, traders were simply gambling their crypto away on the most high-profile unregulated casino. The pump scheme YoBit is running is turning the crypto markets into a joke, as it’s nothing more than a gambling outfit whereby people are risking large sums of money in the hope of landing a once in a lifetime correct guess – you’re better off playing roulette. Instead of trying to guess and hope your bet pays off, why not head over to a regulated Bitcoin casino and strategically gamble with your cryptos – after all, spinning slots with 25 lines and insane graphics is way more fun than hoping you backed the right altcoin.
And the Winner is…. PUTIN!
When the pump clock timer hits zero, it automatically redirects to the lucky crypto. Most recently that crypto turned out to be PUTIN. The pump start price was a mere 0.00000118 BTC and reached 0.00001768 before the final pump was over. YoBit finished dumping its 10 BTC into PUTIN as the price reached 0.00001200 BTC, but the momentum carried on going. In fact, YoBit only pushed 10 BTC in that session, but the whole session saw a whopping 92 BTC traded into the altcoin.
There were a lot of people late to the game, which saw them buying up all the sells back down to around 0.00000500 BTC. Unfortunately for these people, being late to a pump and dump party is never a good idea. The final BTC traded in the pump and dump exceeded 130 BTC, and was still rumbling on at press time. as people tried to squeeze every last satoshi out of PUTIN before the market flattened.
YoBit’s pump managed to trigger a 1398.30% increase in price, brilliant news for those lucky few who bought into PUTIN before the main event. Pump and dump schemes continue to rock the crypto world, and it’s now very clear that exchanges have the power to orchestrate them. There is no doubt that the SEC will be well aware of this and it could potentially negatively impact its decision in the upcoming VanEck and SolidX Bitcoin ETF decision. Let’s hope that the SEC sees this as a Russian exchange having fun with an altcoin named after the country’s leader, rather than a serious case of market manipulation.
