Social media plays a big role in the crypto community, but that’s not always a good thing.
Twitter, Reddit, and TikTok have become virtual gathering places among crypto investors and enthusiasts alike, which also makes them an attractive target for a particular type of scam known as the pump-and-dump. Also known as “rug pulls,” these scams took in more than $2.8 billion worth of crypto in 2021 and accounted for 37% of the year’s crypto scam revenue, up from 1% in 2020, according to research from crypto data firm Chainalysis.
Crypto pump-and-dumps are when conspirators use misleading information to raise the price of a currency, after which they sell it at a profit. A recent cautionary tale follows the experience of some investors with a themed “Squid Game” cryptocurrency. One moment, the SQUID coin was soaring in value, and the next, it was crashing. The coin’s creators are alleged to have cashed out and disappeared with $3 million from investors.
A class action lawsuit was filed in January accusing Kim Kardashian and boxer Floyd Mayweather of pumping the price of EthereumMax, which is unrelated to Ethereum, before company executives dumped the coin for a profit and left everyone else with basically worthless…
