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

It’s the End of the Road for Microsoft Store Movies and TV Shows. What It Means for You

Microsoft has abruptly stopped offering rentals and sales of TV shows and movies on its media platforms.

Microsoft is exiting the market for selling and renting TV and movies across its platforms. There was no reason given for the abrupt change, with Microsoft simply posting the news on a support page on its Xbox website.

«Microsoft has stopped selling new movie and TV content. Existing customers can continue to access their previously purchased content on Windows and Xbox devices,» Microsoft said in the post.

The company said playback and download options will continue to be available for shows and movies people bought previously, but it’s the end of the road for new sales.

On the same page, Microsoft directed users to sign up for Movies Anywhere if they aren’t already members, which makes purchased content available across platforms, and to shop at other media stores including Amazon’s Prime Video, Apple TV and Fandango at Home.

A representative for Microsoft didn’t offer additional comment, but pointed CNET to a similar support blog post on Microsoft’s website.

Microsoft has partnered with many companies over the years to distribute video content since the early 2000s. The move comes as the company has been experiencing mass layoffs and cost cutting across many divisions, including its gaming studios, resulting in the cancellation of multiple upcoming Xbox games.

What happens to content I’ve bought from Microsoft?

Although Microsoft says previously purchased content isn’t going to be unavailable, there are some things to be aware of. According to the support page, you can’t transfer your purchases to another service (although they can be accessed on other services if Movies Anywhere makes them available, but that doesn’t apply to TV shows).

Microsoft isn’t offering refunds for any purchased content, either.

Microsoft says that downloads of movies and TV shows will still work and will be available, «on Windows and in HD max resolution.» Movies and TV shows will still be playable on the Microsoft Movies & TV app.

The company says anyone who is having trouble accessing their purchases can reach out to Microsoft Support.

Technologies

Microsoft Will Erase Your Passwords in 2 Weeks: What to Do Now

If the Authenticator app is your go-to password manager, you’ll need to pick a new one soon.

Microsoft is axing passwords starting in August — and if you use its Authenticator app, you’ll want to be prepared.

For years, Microsoft Authenticator has been a go-to for managing multifactor authentication and saved passwords. However, starting next month, it will no longer support passwords and will move to passkeys instead. That means your logins will soon rely more on things like PINs, fingerprint scans or facial recognition.

Using a passkey can make your account safer, and it’s a move I’m excited about. I recently uncovered that 49% of US adults have risky password habits that can open the door to scammers getting access to your sensitive data.

If you’re a fan of Authenticator and not sure where to start before the switch, here are other password managers CNET recommends and steps you should take before August.

When will Microsoft Authenticator stop supporting passwords?

Microsoft Authenticator houses your passwords and lets you sign into all your Microsoft accounts using a PIN, facial recognition like Windows Hello, or other biometric data like a fingerprint. Authenticator can be used in other ways, such as verifying you’re logging in if you forgot your password, or using two-factor authentication as an extra layer of security for your accounts. In June, the company stopped letting users add passwords to Authenticator.

Starting this month, you won’t be able to use the autofill password function. And next month, you’ll no longer be able to use saved passwords.

If you still want to use passwords instead of passkeys, you can store them in Microsoft Edge. However, CNET experts recommend adopting passkeys during this transition. «Passkeys use public key cryptography to authenticate users, rather than relying on users themselves creating their own (often weak or reused) passwords to access their online accounts,» Tomaschek said.

Why are passkeys a better alternative to passwords?

So what exactly is a passkey? It’s a credential created by the Fast Identity Online Alliance that uses biometric data or a PIN to verify your identity and access your account. Think about using your fingerprint or Face ID to log into your account. That’s generally safer than using a password that is easy to guess or susceptible to a phishing attack.

«Passwords can be cracked, whereas passkeys need both the public and the locally stored private key to authenticate users, which can help mitigate risks like falling victim to phishing and brute-force or credential-stuffing attacks,» said Attila Tomaschek, CNET’s software senior writer and digital security expert.

Passkeys aren’t stored on servers like passwords. Instead, they’re stored only on your personal device. More conveniently, this takes the guesswork out of remembering your passwords and the need for a password manager.

How to set up a passkey in Microsoft Authenticator

Microsoft said in a May 1 blog post that it will automatically detect the best passkey to set up and make that your default sign-in option. «If you have a password and ‘one-time code’ set up on your account, we’ll prompt you to sign in with your one-time code instead of your password. After you’re signed in, you’ll be prompted to enroll a passkey. Then the next time you sign in, you’ll be prompted to sign in with your passkey,» according to the blog post.

To set up a new passkey, open your Authenticator app on your phone. Tap on your account and select «Set up a passkey.» You’ll be prompted to log in with your existing credentials. After you’re logged in, you can set up the passkey.

Other password manager alternatives

Since Microsoft will get rid of all of your passwords in two weeks, you’ll need a new place to store your passwords safely. Tomaschek has a few of the best password manager recommendations after testing and reviewing several.

The top recommendation is Bitwarden for its transparency. It’s open-source and audited annually. From a price perspective, the free plan lets you store infinite passwords across unlimited devices. The free plan also includes features most password managers would charge for, including password sharing and a username and password generator.

Bitwarden’s upgraded plans have other upgraded features that could be worth the cost, too.

Personally, Tomaschek has been using 1Password for a while, and he likes the interface and family plan. Even though it’s second on the list, Tomaschek says it’s just as good as Bitwarden.

Technologies

Today’s NYT Connections Hints, Answers and Help for July 19, #769

Here are some hints and the answers for the NYT Connections puzzle for July 19, #769.

Looking for the most recent 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, Connections: Sports Edition and Strands puzzles.

Today’s NYT Connections puzzle leans heavy on short words, but that didn’t make it any easier. Possibly harder, since a long phrase is easier to match up, at least for me. But as a Gen Xer, I loved the purple category. Read on for clues and today’s Connections answers.

The Times now has a Connections Bot, like the one for Wordle. Go there after you play to receive a numeric score and to have the program analyze your answers. Players who are registered with the Times Games section can now nerd out by following their progress, including number of puzzles completed, win rate, number of times they nabbed a perfect score and their win streak.

Read more: Hints, Tips and Strategies to Help You Win at NYT Connections Every Time

Hints for today’s Connections groups

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

Yellow group hint: Thirsty?

Green group hint: Think Tom Brady or Patrick Mahomes.

Blue group hint: Ouch!

Purple group hint: Heroes in a half shell!