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Celebrity Cryptocurrency Pumping and Dumping Hurts Followers’ Finances
Is your favorite celebrity secretly promoting a crypto scam?
Celebrities and influencers are increasingly being accused of participating in crypto-pump-and-dump schemes. These schemes involve artificially inflating token prices to make profits by selling their stakes, thereby leaving their subscribers to suffer significant losses.
Here are some names that are circulating.
Lil Pump and Moneybagg Yo: naming the “crypto culprits”
Popular celebrities Lil Pump and Moneybagg Yo are among those involved in these fraudulent activities. Both promoted numerous tokens in a deceptive manner, only to later sell their holdings after raising their prices.
Lil Pump introduced his own crypto, $PumpCoin, while Moneybagg Yo launched $SpeakCoin. According to a study by ZachXBT, both celebrities sold their massive stakes in these tokens shortly after promoting them, leading to a sharp decline in their value and substantial losses for investors.
Internet personalities join the fray
Notable internet personalities, including famous YouTuber KSI, have also been involved in these projects. ZachXBT’s investigation revealed that KSI endorsed tokens such as XCAD and Ethernity Chain (ERN) on his social media accounts, only to later dump them, pocketing nearly $1.2 million in the process.
Although KSI attributes his actions to poor investment decisions rather than malice, many, including Coffeezilla, remain skeptical, viewing his behavior as a clear pump-and-dump strategy.
The mechanics of pump and dump systems
Pump and dump strategies typically involve influencers marketing certain currencies through their large followings. They often use social media to make exaggerated claims about the future value of these tokens, creating artificial hype. This hype encourages followers to invest, which drives up the price.
Once the price peaks, influencers sell their tokens, causing the price to drop and leaving their followers with almost worthless coins. This fraudulent activity not only results in significant financial losses for individual investors but also erodes trust in cryptocurrencies.
Where is the responsibility?
The growing prevalence of these schemes has sparked calls for greater accountability from celebrities and highly followed social media personalities. Regulators are urged to monitor and prevent such manipulative practices, thereby protecting vulnerable investors.
Read also: $3 Million in Lost Bitcoin RECOVERED! Researchers hack 11-year-old crypto wallet
When it comes to celebrity advice, maybe stick to their fashion choices instead? Let’s listen to your thoughts.