Evidence has been published by researchers of what they claim is a coordinate pump and dump manipulation system in regards to the Chainlink token.
In a blog post published today by AnChain.Ai researchers, an analysis of suspicious transactions of the token between April and July this year.
The term ‘pump and dump’ is given to a type of microcap fund in which the price of an asset is manipulated by a specific surge of high volume purchases. This is typically done through a group of so-called actors working in complicity.
The increase in purchases has artificially inflated the demand for the asset and therefore the price of the crypto has surged. This led to several oblivious investors being hooked into the LINK coin.
The high-volume purchase strategy is typically paired with circulating positive ‘expert’ or official statements and recommendations online in a bid to lure in casual traders.
When the scheme ends though, the people manipulating ‘dump’ their tokens, leaving unwitting investors with holdings worth zilch.
The researcher highlight:
“Cryptocurrencies tend to be exceptionally vulnerable to this form of attack, as coins are often heavily concentrated in the hands of a comparatively small number of individuals, whose market activities can dramatically impact the coin price.”
This is partly the reason as to why the SEC keep delaying their decision on the bitcoin ETF proposals. The chair for the SEC, Jay Clayton has said recently that due to the manipulation of cryptocurrency, the commission is unable to reach a decision - hence the delays. That being said, he added that they are close to getting an approval sent through.
“There is a product that is the Cryptocurrency asset, then there’s the trading and holding of that asset. We’ve talked about whether some of these assets are securities and clearly we don’t see Bitcoin as a security. But when you put it into a product and make it a security, then we have to worry about whether or not it trades or is held appropriately”.
It will be interesting to see how this plays out. For more news on this and other crypto updates, keep it with CryptoDaily!