ASIC reveals how it infiltrated Telegram’s “pump-and-dump” cryptocurrency pools

The Australian Securities and Investments Commission (ASIC) released the details of how Telegram’s “pump-and-dump” cryptocurrency pools were run down in October..

A “pump-and-dump” scheme typically involves the use of social media to coordinate users to buy large quantities of a poorly traded token in order to artificially increase its price.. You then make massive profits after other investors who are not affiliated with the system buy the coin from FOMO.

The new documents reveal that ASIC has been advised by the financial scientist and cryptocurrency researcher Talis Putnins since the beginning of October.

ASIC reveals how it infiltrated Telegram’s “pump-and-dump” cryptocurrency pools
ASIC reveals how it infiltrated Telegram’s “pump-and-dump” cryptocurrency pools

A 38-slide presentation by Putnins to the ASIC researchers revealed that Pump-and-dump programs are cyclical, peaking in 2018 and again in 2021. The presentation says that tend to “correlate with general market sentiment and prices”.

Pump-and-dump systems are cyclical and will become increasingly popular in 2018 and 2021. Source: Presentation to ASIC by Professor Talis Putnins

According to the presentation, there are a number of factors that have changed between 2018 and when it was released in October 2021. During a six-month period in 2018, Putnins documented more than 355 cases of manipulation of the cryptocurrency market.

He referred to the “transparent intention to pump” and the lack of a “real attempt to ignite momentum”. According to the presentation, the circuit diagrams are “fully revealed for all to see”..

The presentation details the pumping of the Telegram group “Crypto Binance Trading | Signals Pumps” on September 19th of the fractional algorithmic stablecoin system Frax Share (FXS).which achieved a massive 90% on a volume of $ 65 million in less than a minute.

The result of the FXS surge in September was a 90% price increase in less than a minute. Source: Presentation in front of the ASIC by Professor Talis Putnins

“With our volumes averaging $ 40 million to $ 80 million per pump and peaks of up to 450%, we are ready to announce our next big pump “, it said in a corporate statement on 13..

“Our main goal for this pumping will be to ensure that every member of our group makes a massive profit. We will also try to reach over $ 100 million in volume in the first few minutes with a very high percentage gain. “

What is behind the pump and dump systems?

Perception of the lack of legal risks, anonymity in forums and encryption were named as possible reasons for the groups in the presentation., added that there is a “perception that cryptocurrencies are not regulated, so the pumps must be legal”.

The new information was revealed in documents that the Australian newspaper was able to access through a Freedom of Information request. The Australian released the new information on December 28th.

Last year Putnins is co-author of a paper entitled “A new wolf in town? Pump-and-Dump Manipulation in Cryptocurrency Markets “.

The report concluded that the “pump and dump” of cryptocurrencies has caused “extreme price distortions averaging 65%, abnormal trading volumes of millions of dollars and large transfers of wealth between participants.”.

On October 15, Cointelegraph reported that The ASIC had researched schemes in the cryptocurrency and traditional markets operated through social channels such as Twitter, Telegram and the Australian stock chat forum HotCopper..

At this moment, a Telegram account called “ASIC” posted a message in the chat “ASX Pump Organization” warning its 300 members that the watchdog was “monitoring this platform” and its members were examined.

• Coordinated pumping of stocks for profit may be illegal. We can see all processes and have access to the identities of the dealers. […] You are at risk of previous convictions, including fines in excess of a million dollars and jail time. “

Screenshot of an announcement in ASIC’s ASX Pump Organization Telegram chat. Source: Presentation in front of the ASIC by Professor Talis Putnins

An ASIC spokesman told Cointelegraph at the time: “Even if the activity relates to cryptocurrencies / products that may not be financial under company law, The pump-and-dump practice is worrying as it can lead to investor losses and unnecessary price volatility..

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