Pump and dump scams have been with us for hundreds of years, however recently they have evolved to keep pace with today’s world of finance. A Pump and dump scheme is most often done with low priced stocks referred to as “penny stocks.” The scammers buy low priced stocks and then artificially inflate the price of the stocks by using text messages, faxes, Internet chat rooms and other means of communication posing as people with inside information that indicates that a stock is about to rise.  This prompts victims of the scam to buy the stock and temporarily inflate the value of the stock.  Meanwhile, the scammers sell their stock when the stock price gets bumped up and are long gone when the stock deflates and reverts back to its true value. 
Now we are seeing this scam updated to using cryptocurrencies such as Bitcoins as the basis of the pump and dump scam. A number of groups of scammers have actually set up chat groups dedicated to spreading false or misleading information about the value of particular cryptocurrencies in order to profit from the pump and dump scam. You would think that such brazen flaunting of the law would be punished by law enforcement around the world, but, in fact, there are some people that believe that because cryptocurrencies are highly unregulated, the pump and dump securities laws do not apply. However, this is not the position of the Commodity Futures Trading Commission (CFTC) which has gone on record as saying that it considers such activities as being in violation of fraud laws.
Remember my motto, “trust me, you can’t trust anyone.”  You should never invest in anything unless you have carefully investigated the investment and understand it fully.  Stock trading or cryptocurrency trading based on unverified information you receive in a text message, fax or chat room is extremely risky and unreliable. 
Here is a link to the SEC’s warning about possible problems you can encounter when investing in Bitcoins or other cryptocurrencies.
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