Technologies

Cryptocurrency pump-and-dump schemes: Everything you should know about these scams

Don’t be the victim of a rug pull.

Cryptocurrency fans view Bitcoin, Ethereum and Dogecoin as the future of money for the globe. The underlying blockchain technology allows crypto to work by creating a digital ledger that records transactions, which would seemingly create a safer form of currency. But where there’s money to be made, scammers aren’t far behind.

Crypto pump-and-dump schemes are designed to take advantage of people while making some big money for scammers. They generally involve influencers who receive financial incentives for telling people to buy a certain digital coin in order to raise its value. Once the value goes up, the scammers and influencers sell their coins and pocket the profits, while everyone else sees their investments lose value.

These schemes mark the latest twist in the ever-changing story of cryptocurrencies, which have created some millionaires while bankrupting others through their persistent volatility. Even Dogecoin, a cryptocurrency created as a joke, garnered mainstream attention thanks to high-profile figures such as Tesla CEO Elon Musk, who said at last week’s B conference that he «pumps, but doesn’t dump.»

He’s not the only one.

Earlier this month, popular esports organization FaZe Clan suspended multiple members who participated in a crypto pump-and-dump disguised as a charity drive while taking home tens of thousands of dollars.

With cryptocurrencies becoming easier to develop, scammers are taking advantage of people who have developed FOMO, or «fear of missing out,» and are looking to jump on new crypto coins in hopes of getting rich.

Here’s what you need to know about crypto pump-and-dumps.

What is a pump-and-dump scam?

A pump and dump is a securities scam usually involving stocks. Scammers create false hype about a stock in order to generate interest. Once investors start buying shares, the price of the stock goes up. When the price reaches a certain point, the scammers behind the fake hype sell all of their shares. This causes the stock price to plummet, which leaves new investors holding the bag.

The movie The Wolf of Wall Street portrayed the infamous pump-and-dump scam conducted by Stratton Oakmont investment firm in the ’90s.

How does this scam work with cryptocurrency?

It doesn’t work much differently than with stocks. A certain crypto asset is pumped up by people in order to make the value increase.

«As the prices rise, the pump creators dump their assets into the FOMO they’ve generated, resulting in a price crash that leaves the new buyers holding a bag of the assets that now have a lower value than they were purchased at, creating significant and often unrecoverable losses,» said Douglas Horn, chief architect of Telos Core Developers.

What’s different is what’s used for the pump-and-dump. Bitcoin, Etherereum and Dogecoin are well-established cryptocurrencies, and it takes someone with the following of Musk to increase or decrease their value. However, since creating a whole blockchain system for a currency takes a lot of time and effort, those knowledgeable about coding can create their own crypto tokens, which are digital assets using an already existing blockchain like Bitcoin or Ethereum.

These tokens, also referred to as coins, can be created easily like Shiba Inu, which the developers have referred to as a «Dogecoin killer» in a tongue-in-cheek manner. Developers can also create billions of these coins, which in turn means they go for fractions of a penny. One Shiba Inu token, for example, costs $0.0000065, so you can buy 100,000 tokens for less than $1.

Since someone can create billions of tokens easily that cost hardly anything, all that’s needed is to convince enough people to buy these super cheap coins. This can be done through Discord channels, forums or social media, or by getting an influencer to promote the coin in exchange for their own trove of coins.

If the scammers have 1 billion tokens worth $0.000001 then that’s only worth $1,000. But if they can increase the value of a token by just one decimal point, their stash of coins is now worth $10,000. If they dump it quickly, that’ll cause its value to crash.

Another small difference with the crypto pump-and-dump is the term. While it’s known as a pump-and-dump, in crypto circles the scam is referred to as a «rug pull,» as in the rug was pulled right out from under the investors. Part of enticing people to buy these super cheap tokens is to say they’re «rug-proof,» which means there are measures in place to prevent people who have a large number of coins from selling them within a certain time period.

What are some examples of cryptocurrency pump-and-dumps?

In July, four members of the FaZe Clan participated in a pump-and-dump for a token called SaveTheChildren. The pro gamers, along with other influencers, pushed the coin to their followers. Once the price increased, they began selling off the tokens they were given to be part of the scam, with some making an estimated $30,000.

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Another coin called SafeTrade was sold as «rug-proof» earlier this year. Once people started buying, the organizers sold their coins and left everyone else in the dust.

A 2020 study from the University of Technology Sydney and the Stockholm School of Economics in Riga found 355 instances of crypto pump-and-dump scams over the course of seven months. The organizers of these scams made millions.

Are pump-and-dump scams illegal?

For stocks, yes. For cryptocurrency, no.

The Securities and Exchange Commission is the government regulatory agency that investigates securities scams such as insider trading and pump and dumps. It doesn’t yet have similar rules for cryptocurrency, and doesn’t plan on implementing crypto regulations, at least for 2021.

How do you avoid crypto pump-and-dumps?

It’s important to understand if FOMO is contributing to your decision on whether to invest in a cryptocurrency. It may seem like everyone is getting rich off of Bitcoin or Dogecoin, but that’s not the case.

The next is to do your homework. Crypto coins or tokens can be created fairly easily by people who understand coding. If there’s a new coin that’s supposedly going to make you rich, do some web searches to learn more. The initial coin offering, or ICO, will have a «white paper» that offers details about the coin, who’s behind it, what their objective is and so on.

Then there’s a matter of the buzz that’s being generated. A way scammers get the word out about their coin is going into spaces where people are interested in cryptocurrency, such as Discord channels, social media and forums. If all of a sudden some person starts hyping up a brand new token, there’s a good chance they’re pushing a scam.

Be wary of any influencer who you may follow who hardly mentions cryptocurrency and randomly begins promoting a token. In the case of the FaZe Clan members, they promoted coins with a social media campaign and gave out thousands of free coins to their followers, which in turn entices other followers to buy coins — FOMO strikes again. If you’re going to take financial advice, get it from a professional and not someone whose claim to fame is being good at a video game.

Last, if you’re still interested in investing, then don’t invest more than you’re willing to lose. It’s possible that with the right timing, an investor could make money off a pump-and-dump, but it’s better to assume that the money you’re using to buy tokens will be gone forever.

Technologies

Lemon8 and TikTok Could Be Banned. Here’s How the Apps Are Different

TikTok and Lemon8 are owned by the same parent company, but they offer different experiences.

TikTok faces another sale deadline Saturday, and unless a US buyer intervenes — or President Donald Trump extends the deadline again — the app could disappear for US users. If the ban goes into effect, TikTok wouldn’t be the only app to disappear: TikTok’s sister app, Lemon8, could be caught in the crossfire.

Read more: A VPN Alone Probably Won’t Bypass TikTok Bans. Here’s Why

Lemon8 is owned by ByteDance, the same parent company that owns TikTok. It’s one of the top Lifestyle apps in Apple’s App Store, and it has more than 10 million downloads in the Google Play store.

«Lemon8 is a lifestyle community focused app powered by TikTok, where you can discover and share authentic content on a variety of topics such as beauty, fashion, travel, food, and more,» the app’s description reads in both stores.

Here’s what you need to know about Lemon8.

Note: I reached out to ByteDance for this story, and the company did not respond for comment.

What is Lemon8?

Lemon8 is a video- and photo-sharing platform that eschews the vertical-scrolling format of TikTok in favor of a Pinterest board-style format. But what Lemon8 and TikTok do have in common is that both have Following and For You tabs to show you posts from creators you follow and posts the app thinks you will like.

Lemon8’s content is split into six topic tabs, plus a seventh tab called All. The other tabs are Fashion, Beauty, Food, Wellness, Travel and Home. These tabs can be found across the top of your screen, and tapping into these tabs shows you recommended and suggested posts.

Posts can be swipeable photo collections like in Instagram, or TikTok-style videos. Some creators add text to their photos to label clothing or a product. Some will also include the price of the item in the text.

How is Lemon8 different from TikTok and other apps?

Lemon8 is different from other apps in terms of what is posted and how it’s presented.

Lemon8 has a lot of influencer ads and product recommendations. It’s difficult to tell what is and isn’t sponsored content, and this appears to be the norm across the app. TikTok also has sponsored content, but usually these are marked as such in the bottom-left corner.

There aren’t a lot of memes or jokes on Lemon8 compared to other apps, either. You can find memes on Lemon8, but various hashtags associated with «memes,» like «funnymemes» and «catmemes,» have fewer than 1 million views (as opposed to hundreds of millions on Instagram). This could be because Lemon8 is still catching on in the US, but my suspicion is Lemon8 isn’t meant for memes. It’s meant to be more of a guidebook to help you achieve a certain lifestyle or aesthetic.

There’s also a lot of writing in Lemon8. For example, post captions might include instructions for a recipe or a deeper breakdown of an outfit. TikTok captions can have useful information, but those captions are more about connecting posts to hashtags to get more views and don’t necessarily add new information to the TikTok post. Lemon8 uses captions in a similar way to Instagram posts, but Lemon8 captions have one key difference from Instagram: templates.

Lemon8 lets you use templates for your posts to help you quickly format and to give you an idea of what to caption your post. There are caption templates for fashion, shopping finds, beauty, food and travel.

Lemon8 reminds me of a mashup between the magazines Martha Stewart Living, Muscle & Fitness and Travel + Leisure. You can find some useful tips in Lemon8 to help you achieve a desired aesthetic or find some vacation inspiration, but it’s not clear what is and isn’t an ad.

What are people saying about Lemon8?

People’s reaction to Lemon8 is seemingly positive so far. One TikTok creator posted a video calling Lemon8 «Pinterest, but interactive.» Another said Lemon8 is a combination of Pinterest, Instagram and TikTok.

However, this positivity could be artificially inflated. ZDNet reports that many TikTok posts about Lemon8 have described the app with similar language, making some believe ByteDance paid these creators.

And some Lemon8 creators’ claims make this theory sound more viable. One Lemon8 creator told Insider that ByteDance paid them to post on the app. Two other Lemon8 creators showed Insider emails that outlined the app’s payment structure.

Who owns Lemon8?

ByteDance, the Chinese tech company that owns TikTok, also owns Lemon8. According to ZDNet, ByteDance is positioning Lemon8 to be an Instagram rival as more users stop using, or abandon, Meta’s app.

According to the Wall Street Journal, a leaked internal memo from Meta showed that Instagram engagement was declining. ByteDance executives could be hoping to capitalize on this by giving Instagram users an alternative app in the form of Lemon8. And while Lemon8 was released globally in 2020, the app’s recent growth might show ByteDance’s gamble is paying off.

Will Lemon8 be banned alongside TikTok?

Since Lemon8 is owned by ByteDance, which also owns TikTok, it’s possible that the app will be banned alongside TikTok on April 5.

The law requiring the sale of TikTok could be applied generally to other apps that are owned and operated by ByteDance and its subsidiaries. When TikTok shutdown operations in the US in January, Lemon8 was shutdown alongside the app. If TikTok shuts down again, Lemon8 likely will as well.

Should you download Lemon8?

Even with a shutdown looming, Lemon8 is free, so you can download and try the app now before the sale deadline. Just know the app’s posts resemble instructional guides more than memes to share, and many posts feel like advertisements.

What’s Lemon8’s privacy policy?

Most of Lemon8’s privacy policy seems standard for social media apps. It states Lemon8 collects personal and location information to provide you with a better app experience. Some collected information includes your IP address and browsing history. But part of the app’s privacy policy might raise eyebrows.

«The personal information we collect from you may be stored on a server located outside of the country where you live,» the policy reads. The company has servers around the world, according to the policy, so your information could be stored in any of them.

This is different from how Lemon8’s sister app TikTok stores some user’s data. The company stores US-based user data in Oracle servers. TikTok CEO Shou Chew said ByteDance employees in China can access this data, but with «robust cybersecurity controls and authorization approval» overseen by a US-based security team.

For more on the TikTok ban, here’s what to know about the Supreme Court’s decision, here’s what could happen next and here are other apps users are flocking to.

Technologies

Today’s NYT Connections: Sports Edition Hints and Answers for April 4, #193

Three of the four categories are especially tough today. Here are hints and the answers, for the NYT Connections: Sports Edition puzzle, No. 193, for April 4.

Looking for the most recent regular Connections answers? Click here for today’s Connections hints, as well as our daily answers and hints for The New York Times Mini Crossword, Wordle and Strands puzzles.

I only solved one of the four categories for today’s Connections: Sports Edition on my own, so if you need help, you’re not alone.

The yellow category was pretty simple, but after that I couldn’t make any connections. It might help if you know a lot about a certain NBA player’s resume. Read on for hints and the answers.

Connections: Sports Edition is out of beta now, making its debut on Super Bowl Sunday, Feb. 9. That’s a sign that the game has earned enough loyal players that The Athletic, the subscription-based sports journalism site owned by the Times, will continue to publish it. It doesn’t show up in the NYT Games app but now appears in The Athletic’s own app. Or you can continue to play it free online.

Read more: NYT Connections: Sports Edition Puzzle Comes Out of Beta

Hints for today’s Connections: Sports Edition groups

Here are four hints for the groupings in today’s Connections: Sports Edition puzzle, ranked from the easiest yellow group to the tough (and sometimes bizarre) purple group.

Yellow group hint: Do better.

Green group hint: March Madness.

Blue group hint: Six-time all-star.

Purple group hint: Think Wimbledon.

Answers for today’s Connections: Sports Edition groups

Yellow group: Not meeting expectations.

Green group: Teams in the Women’s Final Four.

Blue group: Teams Kawhi Leonard has played for.

Purple group: Ends in a piece of tennis equipment.

Read more: Wordle Cheat Sheet: Here Are the Most Popular Letters Used in English Words

What are today’s Connections: Sports Edition answers?

The yellow words in today’s Connections

The theme is not meeting expectations. The four answers are bust, disappointment, dud and failure.

The green words in today’s Connections

The theme is teams in the Women’s Final Four. The four answers are Bruins, Gamecocks, Huskies and Longhorns.

The blue words in today’s Connections

The theme is teams Kawhi Leonard has played for. The four answers are Aztecs, Clippers, Raptors and Spurs.

The purple words in today’s Connections

The theme is ends in a piece of tennis equipment. The four answers are bracket, eyeball, horseshoes and internet.

Quick tips for Connections: Sports Edition

#1: Don’t grab for the easiest group. For each word, think about other sports categories it might fit in – is this a word that can be used in football, or to describe scoring options?

#2: Second meanings are important. The puzzle loves to use last names and even college names that mean other things, to fool you into thinking they are words, not names.

#3: And the opposite is also true. Words like HURTS might seem like a regular word, but it’s also the last name of at least one pro athlete.

Technologies

Skip Your iPhone’s Lockscreen: Here’s the Hidden Flashlight Trick You Need to Know

A couple of taps can really make a difference on your iPhone.

Not long ago, your iPhone’s lockscreen would only allow two app shortcuts that you couldn’t change: camera controls and a flashlight toggle. However, iOS 18.2 allows you to customize these shortcuts to almost anything you might want. This small but impactful change is one of many ways iOS 18 supercharges customization for iPhone and iPad users. But what if you still want an easy-to-access way to toggle your flashlight without unlocking your phone?

Apple introduced an accessibility feature in iOS 14 that, once enabled, allows you to perform actions by just tapping on the back of your phone. The feature is called Tap Back and it remains a sleeper feature that’s sneakily hidden away in your settings menu. Enabling Tap Back essentially allows you to create a button on the back of your iPhone to perform an action without needing to take up any space.

Once you have Tap Back enabled, it doesn’t take long to see how much of a game-changer it can be with its added convenience. Below, we’ll show you how to set it up so a couple of taps on the back of your iPhone will let you launch just about anything you want.

For more, check out what’s in the latest iOS 18.4 release.

How to set up Back Tap on iPhone

Whether you want to link Back Tap with your flashlight, camera or launch a different iPhone app, the path through your iPhone settings begins the same way.

On your compatible iPhone (iPhone 8 or later), launch the Settings application and go to Accessibility > Touch > Back Tap. Now you have the option to launch your action (in this case, your flashlight) with either two or three taps. Although two taps is obviously faster, I would suggest three taps because if you fidget with your phone, it’s easy to accidentally trigger the accessibility feature.

Once you choose a tap option, select the Flashlight option — or a different action if you prefer. You’ll see over 30 options to choose from, including system options like Siri or taking a screenshot, to accessibility-specific functions like opening a magnifier or turning on real-time live captions. You can also set up Back Tap to open the Control Center, go back home, mute your audio, turn the volume up and down and run any shortcuts you’ve downloaded or created.

You’ll know you’ve successfully selected your choice when a blue checkmark appears to the right of the action. You could actually set up two shortcuts this way — one that’s triggered by two taps and one that’s triggered by three taps to the iPhone’s back cover.

Once you exit the Settings application, you can try out the newly enabled Back Tap feature by tapping the back of your iPhone — in my case, to turn on the flashlight. To turn off the flashlight, you can tap on the back of your iPhone as well, but you can also just turn it off from your lock screen if that’s easier.

For more great iPhone tips, here’s how to keep your iPhone screen from dimming all the time and canceling all those subscriptions you don’t want or need.