The Australian Securities and Investments Commission (ASIC) tracks pump-and-dump groups on Telegram.
On Monday, an account called “ASIC” posted a message in the “ASX Pump Organization” group on Telegram warning about 300 members that “we are monitoring this platform and may investigate it”.
“Coordinated pumping of stocks for profit could be illegal. We can see all processes and have access to the identities of the dealers. […] You run the risk of previous convictions, including fines in excess of a million dollars and jail terms. “
Many of the group members assumed the account was wrong, but the ASIC confirmed to the Australian newspaper the validity of the now-deleted message.
While some community members laughed at the ASIC’s message, others expressed frustration at having been attacked instead of corporations and corporate traders.
“What the ASIC should be doing is tracking the companies that are trading all the time and not spending their precious time here pestering 300 retail investors who are doing nothing wrong by sharing stock recommendations. That must be the greatest joke of all time “, wrote a member.
On September 23, ASIC warned of a “disturbing trend” of social media groups engaging in “blatant” pump-and-dump campaigns. It states that “in some cases, posts on social media forums can mislead subscribers by suggesting that the activity is legal” before warning of prison sentences of up to 15 years and fines of more than $ 1 million will.
“ASIC has worked closely with market operators to identify and pause pump-and-dump campaigns, and we will continue to take action that threatens the integrity of the markets and, if necessary, take compliance measures.” ASIC Commissioner Cathie Armor said in the context of the statement.
Cryptocurrency pumps and dumps weren’t a specific target for the ASIC, however a regulator spokesman told Cointelegraph:
“The campaign is aimed at publicly traded stocks, but the message is relevant to all financial products, including all crypto-assets that can be or contain financial products.”
“Even if the activity relates to cryptocurrencies / products that may not be financial products within the meaning of the German Stock Corporation Act, the pump-and-dump practice is worrying as it can cause losses for investors and create unnecessary price volatility.” added the representative.
Groups of pumping and emptying They’ve grown in popularity this year after the r / Wallstreetbets and Robinhood sagas in January. The Reddit group, which is certainly more about pumping than dump, worked together to promote stocks that hedge funds were short selling against, like GameStop (GME) and AMC Entertainment (AMC).