7 lines
568 B
Markdown
7 lines
568 B
Markdown
# Pump and Dump Scheme
|
|
|
|
A type of market manipulation based on [asymmetric-information](asymmetric-information.md) in which buying of an asset is coordinated by a set of insiders to temporarily artificially inflate the price and bring in more buyers which are used as exit liquidity for the insiders to "dump" their positions.
|
|
|
|
Pump and dump schemes are illegal in most regulated markets such as public stock markets, but are rampant in crypto markets.
|
|
|
|
Pump and dump schemes result in a net wealth transfer from the market at large to an economic [cartel](cartel.md). |