A cautionary statement about cryptocurrency pump-and-dump schemes has been released by The Commodity Futures Trading Commission (CFTC).
The statement warns investors against making purchase decisions based solely on tips found on social media as well as sudden spikes in prices and advises thorough research of “virtual currencies, digital coins, tokens, and the companies or entities behind them in order to separate hype from facts,”
The statement continued to describe a typical social media pump and dump scheme in which fake news focusing most commonly on renowned investor’s intention to pipe large amounts of money into an obscure virtual coin are used to increase the price of the token.
It’s an “old scam, new technology,” the CFTC said.Tags: cftc, crypto
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