17 lines
2.0 KiB
Markdown
17 lines
2.0 KiB
Markdown
# Pump and Dump Scheme
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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.
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Pump and dump schemes are illegal in most regulated markets such as public stock markets, but are rampant in crypto markets.
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Pump and dump schemes result in a net wealth transfer from the market at large to an economic [cartel](cartel.md).
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## References
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1. Livni, Ephrat, and Andrew Ross Sorkin. 2021. ‘The Dramatic Crash of a Buzzy Cryptocurrency Raises Eyebrows’. The New York Times, 28 June 2021, sec. Business. https://www.nytimes.com/2021/06/28/business/dealbook/icp-cryptocurrency-crash.html.
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1. Dhawan, Anirudh, and Talis J. Putnins. 2020. ‘A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets’. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3670714.
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1. Hamrick, JT, Farhang Rouhi, Arghya Mukherjee, Amir Feder, Neil Gandal, Tyler Moore, and Marie Vasek. 2018a. ‘An Examination of the Cryptocurrency Pump and Dump Ecosystem’. http://ssrn.com/paper=3303365.
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1. *———. 2018b. ‘The Economics of Cryptocurrency Pump and Dump Schemes’.
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1. Kamps, Josh, and Bennett Kleinberg. 2018. ‘To the Moon: Defining and Detecting Cryptocurrency Pump-and-Dumps’. Crime Science 7 (1): 18.
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1. Li, Tao, Donghwa Shin, and Baolian Wang. 2019. ‘Cryptocurrency Pump-and-Dump Schemes’. Available at SSRN 3267041.
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1. Livni, Ephrat, and Andrew Ross Sorkin. 2021. ‘The Dramatic Crash of a Buzzy Cryptocurrency Raises Eyebrows’. The New York Times, 28 June 2021, sec. Business. https://www.nytimes.com/2021/06/28/business/dealbook/icp-cryptocurrency-crash.html.
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1. Diehl, Stephen. 2021. ‘Et Tu, Signal?’ 7 April 2021. https://www.stephendiehl.com/blog/signal.html.
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1. Xu, Jiahua, and Benjamin Livshits. 2019. ‘The Anatomy of a Cryptocurrency Pump-and-Dump Scheme’. In 28th USENIX Security Symposium, 1609–25. |