Oct 01, 2018
Recognized as a global leader in RegTech for blockchain, Coinfirm serves as a foundation for the safe adoption and use of blockchain. The Coinfirm AML/CTF Platform uses proprietary algorithms and big data analysis to provide structured, actionable data that solves compliance and transaction risk issues in blockchain and cryptocurrencies. The blockchain agnostic platform is currently used by anyone ranging from major financial institutions to exchanges. In addition, Coinfirm develops dedicated blockchain solutions such as the data provenance platform Trudatum that was recently integrated by the largest bank in CE.
Welcome to week 9 of the Crypto Alert of the Week series by AMLT, a series dedicated to documenting interesting or high profile frauds/hacks etc that recently happened and have been reported into the AMLT Network and show how the AMLT Network can help track and prevent it in the future.
Pump and dump groups, although their prime seems past us, are still a pretty common sight in the crypto space. It’s basically a case of an old brew in a new bottle, as the scheme originated from securities fraud on traditional stock exchanges.
The scheme is based around a group of people (called the organizers or insiders) spreading around false and misleading information, that lead to people buying a certain asset, drastically inflating its price. As people catch up to the hype and start buying in, the scammers usually have already sold their positions leaving the general public with an overpriced asset that – in a matter of minutes – starts dropping back to its starting price, or even below it. Below you have a promotional post by “PUMP OFFICIAL CRYPTO” telling its followers to pump the ALIS coin with a graph below showing the subsequent effects, flaring the market price up allowing particular holders to profit before crashing it down.
In case you don't see the image below click here.
Such groups tend to use chat programs like Telegram, Discord or even Slack, cross-promoting among others in order to gain a sufficient following. An additional source of income are also referral links and paid access to so called “VIP groups”. For a hefty fee, an interested party gets invited to the “inner circle” (which may, and usually is manufactured and consists only of outsiders) in order to receive such signals ahead of the public.
In case you don't see the image below click here.
The victims of these scams (aside from the innocent bystanders and general public that jumped on the hype) are usually small, low market cap cryptocurrencies on unregulated exchanges. In the traditional market, this kind of manipulation is illegal, but since the cryptocurrency space is still very much unregulated, the perspective of profits in the range of 50-200% in a span of 10 minutes seems really appealing to a lot of people. There’s no doubt, that proper KYC/AML industry standards could put a stop to many of cases of such manipulation, but the crypto ecosystem itself needs to be involved, that’s why we’ve built the AMLT Network to provide the first ever reporting system to help fight against fraud, scams, ransomware and other nefarious actions related to cryptocurrency addresses.
See here how you can report and get rewarded for submitting data into the AMLT Network and help make the cryptoeconomy a more transparent and safer one. Once reported into the Network and verified by our data team the risk reports for these addresses reflect the appropriate flag and elevated risk rating as well as behavioral profile.
Check out what we did with a pump and dump group below.
In case you don't see the AML risk report below click here.
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The AMLT Team
AMLT is the token for the AMLT Network and Coinfirm AML/KYC Platform. The first solution allowing the global economy to provide data to fight ransomware, hacking, malware and other online fraud and scams touching the cryptocurrency economy. In return for valid data provided, AMLT Network Members are rewarded in AMLT that can then be used in various ways. Created by Coinfirm, a global leader in regtech for blockchain and cryptocurrency, AMLT not only creates the first system where entities can report addresses and evidence tied to nefarious actors in the economy, but AMLT token can be used for discounted services on the Coinfirm AML/KYC Platform that is already servicing countless ICOs and over 100 companies in both the cryptocurrency and traditional spaces. Network Members also receive privileged access to Coinfirm products such as our tools and panels, the AMLT knowledge pool with exclusive content and materials as well as additional benefits and features, helping them limit exposure to risk and increase transparency for themselves, their clients and the entire digital economy.