“Pump and Dump” is a scam where someone hypes up a stock (or any asset) to push the price up—then quickly sells their own shares at the higher price, leaving everyone else with losses when the price crashes back down.
People usually see it on social media or chat apps: a poster claims a tiny, unknown coin or stock is “about to explode,” posts rocket emojis, and urges followers to buy fast. The crowd piles in, the price spikes for a short while, and the original promoter quietly dumps everything, disappearing with the profit.
Meaning & Usage Examples
- Sentence: “That influencer was pumping Doge clones on Telegram last night—classic pump and dump.”
- Quick tip: If you see sudden hype around a micro-cap asset and the same account keeps pushing it, that’s a red flag.
Context / Common Use
It shows up most in crypto forums, meme-stock subreddits, and shady WhatsApp groups. Regulators like the SEC and FCA repeatedly warn about it, and trading platforms now add pop-ups when volume spikes on thinly traded tokens.
Is pump and dump illegal?
Yes. In most countries it counts as market manipulation and can lead to heavy fines or prison time.
How can I spot a pump and dump early?
Look for sudden hype from anonymous accounts, no real news behind the surge, and a chart that rockets straight up then drops just as fast.
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