Pump and Dump
Pump and dump is a fraudulent practice that artificially drives up the price of a digital asset by promoting or spreading false information, followed by a rapid sale for profit. Buyers who enter late may suffer losses when the price collapses.
How It Works
Typically, a small number of people, such as creators or early holders, accumulate a large amount of the asset and then increase demand through social media promotion, hype, or the dissemination of false information. Once the price has been driven to a high level, the parties involved sell in large volumes, and the market price may fall rapidly.
Risks and Prevention
Pump-and-dump schemes make it difficult for investors who bought later at high prices to exit in time, and they undermine user trust and industry development. The materials indicate that this conduct is not only unethical but may also be illegal. Learners should independently research a project’s fundamentals and remain alert to artificially generated rapid returns.
Original Tutorial
https://www.binance.com/zh-CN/academy/glossary/pump-and-dump
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