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Subscribe Sign In. Markets Data. Pump and dump schemes are where people collude to buy a small cryptocurrency at the same time and thus push up the price by inflating demand. Those involved then book a quick profit, often in a matter of minutes, by selling to new investors who are attracted by the rising price.

He argues that because the "pump" is so quick — prices can leap higher and then crash in just a matter of minutes — there is no time to mislead other investors as to the nature of the investment.

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If they lose money that's their own fault for not doing proper research before buying — caveat emptor. You would assume that newbies get misinformed but how? There are hundreds of currencies, there is no way they have the time to react to this," he said. And they know the rule[s]. It's a never-ending cycle. Nico argues that the "signals" to buy that traders send on Telegram groups are not unlike stock recommendations from analysts.

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But the boss of JP Morgan would make such comments publicly, leaving investors to judge for themselves. If he privately told people to buy a certain stock, based on knowledge of a future disclosure or market move, there could be a case to answer for insider trading. Telegram group are public," Nico said.

Groups form on the deep web, then create Telegram groups, and everyone is free to join these. Others would disagree. When presented with the evidence BI collected from "pump and dump" groups and their activities, Ben Kingsley, a partner at the law firm Slaughter and May who specialises in financial regulation, said it looked like "market manipulation Nico estimates that are around 20 serious pump and dump groups out there but only five "with real power.

Nico claims to be in contact with many of the organisers of the other Telegram groups that coordinate pumps and said he first made contact with them in forums on the dark web. It's like that. We are all in hacking and stuff for years and in these communities, we don't share personal info.

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To be honest, there is a group on the deep web where we share real illegal info insider trading on big companies. That is where I met some of them. Other people that don't work there will benefit. If the person didn't lie, then he is accepted into the community and can benefit from other people's info. During the fact-checking of this piece, Nico provided BI with a dark web link to a private forum called "The Stock Insider" that appeared to be genuine.

He did not provide a link to crypto trading forums.