Trades on the largest cryptocurrency exchanges are manipulated by groups of scammers who use the "pump and dump" schemes forbidden in the traditional financial market.

Dozens of trade groups manipulate prices of cryptocurrencies on major cryptocurrency exchanges, with its organizers earning at least $825 million over the past six months, and their victims, who believed in the effectiveness of such schemes, suffered losses of millions of dollars, the researchers of the Wall Street Journal revealed.

Within the period from January to July, journalists discovered 175 pump and dump schemes manipulating rates of 121 cryptocurrencies, which suddenly rose in price and fell sharply in value a few minutes after the growth.

About 25 pump and dump schemes with the highest growth rate of manipulated cryptocurrency completely returned to the previous level of trading just a few hours after the pump.

The pump and dump scheme is one of the oldest and most common types of fraud in the market. Fraudsters buy an asset at the bottom, then give a signal to investors, they start in a hurry to buy up that asset, it rises in price, and the organizers of the scam sell the asset at the highest price.

That trading strategy was banned in the US in the 1930s. But despite the ban, this scheme continued to be used by unscrupulous traders. During the dotcom bubble, pumps again seized the market. One of the most famous pumpers of that time was Stratton Oakmont, founded by "The Wolf of Wall Street" Jordan Belfort. In 1999, Belfort pleaded guilty to securities fraud using pump and dump schemes involving 34 companies, which cost investors more than $200 million.

The US Securities and Exchange Commission (SEC) regularly brings cases against similar schemes in the stock market. Manipulations with cryptocurrencies do not differ in essence, but the cryptocurrency market is not regulated yet, therefore such schemes flourish there.

Fraudsters prefer to discuss future campaigns in instant messengers and chat rooms, mainly in Telegram. Thus, the number of subscribers of the Big Pump Signal channel in Telegram exceeds 74,000. This group initiated 26 pumps with trading volume of $222 million. Many groups work in private chats, accessible only by invitation, and their moderators are usually anonymous.