Hamrick, JT;
Rouhi, F;
Mukherjee, A;
Feder, A;
Gandal, N;
Moore, T;
Vasek, M;
(2021)
An examination of the cryptocurrency pump-and-dump ecosystem.
Information Processing & Management
, 58
(4)
, Article 102506. 10.1016/j.ipm.2021.102506.
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Abstract
The recent introduction of thousands of cryptocurrencies in an unregulated environment has created many opportunities for unscrupulous traders to profit from price manipulation. We quantify the scope of one widespread tactic, the “pump and dump”, in which actors coordinate to bid up the price of coins before selling at a profit. We joined all relevant channels on two popular group-messaging platforms, Telegram and Discord, and identified thousands of different pumps targeting hundreds of coins. We find that pumps are modestly successful in driving short-term price rises, but that this effect has diminished over time. We also find that the most successful pumps are those that are most transparent about their intentions. Combined with evidence of concentration among a small number of channels, we conclude that regulators have an opportunity to effectively crack down on this illicit activity that threatens broader adoption of blockchain technologies.
| Type: | Article |
|---|---|
| Title: | An examination of the cryptocurrency pump-and-dump ecosystem |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1016/j.ipm.2021.102506 |
| Publisher version: | https://doi.org/10.1016/j.ipm.2021.102506 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | Science & Technology, Technology, Computer Science, Information Systems, Information Science & Library Science, Computer Science, Cryptocurrency, Price manipulation, Cybercrime measurement |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > Dept of Computer Science |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10133232 |
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