How are you? By Allah's grace, I'm doing very well.

A very dangerous and common fraud in the cryptocurrency and stock market is called 'Pump and Dump'. This is an unethical strategy in which the price of a token or coin is artificially inflated, and when ordinary investors invest in it, the fraudsters sell all the coins they have and disappear from the market. While a group of people profit in this process, ordinary investors lose everything.

How does it work?

The pump and dump scheme is mainly completed in two steps: First, a group of large investors or influential people (called 'wheels') choose a very low-value or unknown coin. They secretly buy a large amount of that coin cheaply. Then they start promoting it on various social media such as Telegram, Discord or Twitter (X) that this coin will soon give several times the profit. This creates an artificial 'hype' or FOMO (Fear of Missing Out) among the general public and they start buying the coin in a hurry. This causes the price of the coin to increase rapidly. When the price reaches a certain height, the main promoters or promoters suddenly sell all their coins at a high price. Since they sell in large quantities, the market balance is lost and the price of the coin collapses dramatically. Ordinary investors then no longer get the opportunity to sell and in an instant the value of their assets becomes almost zero.

Ways and signs to be careful

To avoid such scams, it is important to know some signs. First, if the price of an unknown coin suddenly increases by 100% or 200% for no reason, be careful. Second, if an influencer or group on social media repeatedly pressures to buy a particular coin or dreams of "getting rich overnight", then you know that there is a strong possibility of pump and dump. Remember, it is much easier for fraudsters to manipulate coins that have very low 'market cap' and 'liquidity'.

Conclusion

In short, pump and dump is a modern digital fraud. Since the crypto market is still unregulated in many countries, it is difficult to take any legal action to prevent such manipulation here. When it comes to investing, you should always do your own research or DYOR (Do Your Own Research) instead of giving priority to emotions. If a coin has no technical basis or real use, investing in it just because it is exciting means falling into the trap of pump and dump. Awareness is the only way to avoid this digital fraud. Today's discussion concludes here. I hope you've found it interesting. Please share your thoughts on today's topic. Prayers for everyone. May everyone be well. Amen.