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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

We Played Nintendo Switch 2: Mario, Donkey Kong, Mouse, Camera and a Lot More

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Nintendo Switch 2: Every Reveal About the Console, New Games, Price, Release Date

The $450 console launches June 5, with Mario Kart World the highlight of its launch day game lineup.

The Nintendo Switch 2 console’s biggest reveal yet arrived Wednesday as part of the company’s latest Nintendo Direct event. This teed up a day of Switch 2 reveals that include its June 5 release date, a $450 price, its specs and its initial game lineup that extends from launch into 2026

The console will be further buoyed by having Mario Kart World as a launch title, which will go on sale in either a $500 bundle with the Switch 2 or on its own for $80 — making the open-world racing game one of Nintendo’s most expensive yet. Other games announced, such as Donkey Kong Bananza, are being priced around $70, which matches the cost of 2023’s The Legend of Zelda: Tears of the Kingdom. That Zelda game and Breath of the Wild are among the original Switch titles that will get enhanced Nintendo Switch 2 Edition upgrades, a premium upgrade allowing players to get new features, modes and graphical enhancements that take advantage of the newer system’s capabilities. 

Here are the top highlights from Nintendo’s console event, all of the games we’ve heard about so far (including new titles, Nintendo Switch 2 Editions and GameCube games coming to Nintendo Switch Online) and all of our coverage so far. You can also check out our Nintendo Switch 2 live blog for even more updates about the Switch 2 as we learn them. 

Nintendo Switch 2 console

The Nintendo Switch 2’s specs saw a noticeable technical bump over the Switch. The Nintendo Switch 2 has a 7.9-inch, 1080p resolution LCD that supports a 120Hz refresh rate — matching what we now see on most Android phones. When the Switch 2 is docked, compatible games can run in 4K resolution. The new dock also includes a cooling fan. 

The Switch 2 comes with 256GB of internal storage, and the new Switch 2 Game Cards will load games faster. For digital libraries, however, the Switch 2 will only work with microSD Express cards, which are different from the microSD cards that are compatible with the prior Nintendo Switch. Nintendo will have a Software Transfer feature available to help move games and data from the original Switch to the Switch 2.

The new Joy-Con for the controllers will support mouse controls, and a new C button will be part of a new GameChat communication feature that allows both voice and video chat. There’s also a Nintendo Switch 2 Camera, allowing players to see each other.

The Switch 2 also adds a second USB-C port to the top of the system, which Nintendo says can help connect its new camera accessory or charge the console when playing in tabletop mode. Nintendo also revealed a new Switch 2 Pro Controller with the C button and customizable GL and GR buttons on the back.

Following the presentation, Nintendo unveiled the system’s price of $450 in the US. It will also sell the Switch 2 bundled with a digital version of Mario Kart World for $500.

Mario Kart World

Mario Kart World removes its traditional boundaries and lets drivers roam freely across an entire world of race courses. The game will get its own Nintendo Direct later this month, where we’ll see additional details, but we already know it’ll include traditional races and a Free Roam mode, much like in the Forza Horizon series. 

Getting the game bundled for an extra $50 on the cost of the Switch 2 might be the move if you are interested in the game, because Nintendo announced on its website that standalone copies of Mario Kart World will cost $80

Joy-Con 2 C button and GameChat

Nintendo’s rolling out its new C button across several new Switch 2 controllers. The button will be used for the new GameChat communication features without a headset. The button will be used alongside a microphone on the console itself, which Nintendo says can be used whether it’s docked to a TV or in handheld mode. 

In its teaser video, Nintendo promises the microphone will be able to cancel out loud background noises. GameChat will also work with a Nintendo Switch 2 Camera, allowing video chat and various camera-based game modes in supported titles. GameChat will be free at launch through March 31, 2026.

Nintendo Switch 2 Edition games upgrade titles

The Nintendo Switch 2 will play three types of games: original Switch games, Switch 2 games and Switch 2 Edition games that will receive substantial enhancements. For many of these Switch 2 Edition games, you’ll need to buy an upgrade pack if you own the original for Switch. Many of them will get more than just enhanced graphics in the upgrade; for example, Super Mario Party Jamboree will get new games that support the new Joy-Cons’ mouse controls, audio recognition and video camera gameplay options through the Switch 2 Camera. 

Other Nintendo Switch games that are getting Switch 2 Edition options include The Legend of Zelda Breath of the Wild, The Legend of Zelda Tears of the Kingdom, Kirby and the Forgotten Land, Metroid Prime 4 Beyond and Pokemon Legends: Z-A. Enhancements vary: The Zelda games will start working with a companion phone app for maps and sending schematics to friends, while Kirby will get a new story that’s exclusive to the Switch 2 Edition. On the third-party side, Civilization 7 will get mouse controls.

Nintendo did not announce what upgrade packs will cost. However, some Switch games will get free updates that will improve performance or enhance features when playing them on the Switch 2. The Switch games getting these updates include:

Hyrule Warriors: Age of Imprisonment

Hyrule Warriors: Age of Imprisonment is a new game set in the world of Zelda that tells the story that leads into The Legend of Zelda: Tears of the Kingdom. This appears to be similar to how Hyrule Warriors: Age of Calamity told the story of a war that led to the events of Breath of the Wild. The teaser shows Zelda discovering that she’s arrived in the past of Hyrule, and the game will expand on how she gets involved in the corresponding Imprisonment War.

Nintendo Switch 2 games

Several other first- and third-party games were spotlighted during the Switch 2 Direct. These include Donkey Bananza, one of the first 3D platforming games featuring DK since 1999’s Donkey Kong 64. Kirby will also return to the racing genre in Kirby Air Riders, which comes more than 20 years after the GameCube racer Kirby’s Air Ride. DragXDrive will use mouse controls to control a futuristic wheelchair basketball game in which players will simulate push and pull motions to control their character.

An onslaught of Switch 2 third-party games were quickly shuffled through during the Direct, which I list below. An unnamed James Bond game is in development at Hitman studio IO Interactive, as is a darker title from Elden Ring creator FromSoftware called The Duskbloods, which will be exclusive to the Switch 2. 

The full list of announced Nintendo Switch 2 games includes:

  • Borderlands 4
  • Bravely Default Flying Fairy HD Remaster
  • Cyberpunk 2077: Ultimate Edition
  • Daemon X Machina: Titanic Scion
  • Deltarune
  • Donkey Kong Bananza
  • Drag x Drive
  • EA Sports FC
  • EA Sports Madden NFL
  • Elden Ring Tarnished Edition
  • Enter the Gungeon 2
  • Fast Fusion
  • Final Fantasy 7 Remake Intergrade
  • Fortnite
  • Hades 2
  • Hitman World of Assassination — Signature Edition
  • Hogwarts Legacy
  • Hollow Knight: Silksong
  • Hyrule Warriors: Age of Imprisonment
  • Kirby Air Riders
  • Kirby and the Forgotten Land — Nintendo Switch 2 Edition and Star-Crossed World
  • Kunitsu-Gai: Path of the Goddess
  • Mario Kart World
  • Metroid Prime 4: Beyond — Nintendo Switch 2 Edition
  • NBA 2K
  • Nintendo Switch 2 Welcome Tour
  • Nobunaga’s Ambition: Awakening Complete Edition
  • Pokemon Legends: Z-A — Nintendo Switch 2 Edition
  • Project 007
  • Puyo Puyo Tetris 2S
  • Rune Factory: Guardians of Azuma — Nintendo Switch 2 Edition
  • Sid Meier’s Civilization 7 — Nintendo Switch 2 Edition
  • Split Fiction
  • Star Wars Outlaws
  • Starseeker: Astroneer Expeditions
  • Street Fighter 6
  • Super Mario Party Jamboree — Nintendo Switch 2 Edition and Jamboree TV
  • Survival Kids
  • The Duskbloods
  • The Legend of Zelda: Breath of the Wild — Nintendo Switch 2 Edition
  • The Legend of Zelda: Tears of the Kingdom — Nintendo Switch 2 Edition
  • Tony Hawk’s Pro Skater 3 and 4
  • WWE 2K
  • Yakuza 0 Definitive Edition

Among these titles, you can see the full list of June 5 Switch 2 launch day games here.

Nintendo GameCube library coming to Switch 2

The Nintendo Switch Online game library will add GameCube games to the Switch 2. On launch day, these games will initially include The Legend of Zelda: The Wind Waker, SoulCalibur 2 and F-Zero GX, with each game getting enhanced graphics. Online multiplayer will also be added to certain titles. Super Mario Sunshine, Super Mario Strikers and Luigi’s Mansion are among the games set to arrive later. At launch, Nintendo will also sell a GameCube controller, which will be wireless and include a C button for GameChat.

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