Crypto Pump and Dump Scams are Never Worth it, Here is Why
The following are the main reasons why participating in pump and dumping schemes in cryptocurrency in 2025 is not worthwhile: Pump and dumping is illegal: Those involved in pump and dumping in traditional stock markets face up to 15 years in prison and millions of dollars in fines. Although the regulatory framework has not fully covered cryptocurrency, countries are slowly but surely updating measures to include digital assets. The latest data from 2025 shows that global losses from crypto fraud reached $6.8 billion last year, with pump and dumping schemes accounting for 35% of the losses. New complex methods include AI-driven automated operations, deepfake celebrity endorsements, and cross-chain obfuscation techniques, making these scams more dangerous than ever.
The latest trends in crypto eyewash in 2025
According to Gate’s observations of market trends for 2025, the strategies for Crypto Assets pump and dumping plans have evolved into more complex tactics. The latest data shows that global losses from crypto eyewash exceeded $6.8 billion in 2024, with pump and dumping plans accounting for about 35% of these losses.
Key developments identified by Gate analysts include:
- Increased automation: eyewash now deploys AI-driven robots that can simultaneously coordinate large buy orders for thousands of wallets.
- Celebrity Impersonation: Fraudsters create deepfake videos of financial influencers to promote worthless tokens.
- Cross-chain obfuscation: New technology involves transferring assets between multiple blockchains to hide transaction traces.
| eyewash type | success rate | average loss |
|---|---|---|
| Traditional pump and dumping | 12% | 3,200 美元 |
| Artificial Intelligence Enhanced pump dumping | 28% | 7,500 USD |
| Multi-chain pump dumping | 31% | 9,400 USD |
Major platforms have implemented real-time anomaly detection systems to flag suspicious trading patterns. Gate utilizes advanced blockchain analysis technology to identify potential pump and dumping schemes, preventing them from affecting users. Despite the continuous advancement of fraud prevention technology, education remains the most effective line of defense against these evolving threats.
Why is “pumping and dumping” not advisable?
The following are the main reasons why the Crypto Assets pump and dump eyegash is not advisable:
- Pump and dumping is illegal:
Those who participate in pump and dumping in traditional stock markets can face up to 15 years of imprisonment and millions of dollars in fines. Although the regulatory framework has not yet been developed around Crypto Assets, countries are steadily building relevant measures to include the digital asset space. - You are not the shark, but the bait:
The organizers of the pump and dump use groups with thousands of members to sell the assets they acquired weeks or even months ago, while thousands of bait find it difficult to find the right time to sell, often resulting in huge losses for traders. - Low liquidity can cause you to lose money:
Low market cap crypto assets have very few investors, so who will buy back the assets from you? Once the pump is over and the dust settles, the scammers will take their profits and run, leaving you helpless as you watch your unsellable coins, with no other buyers willing to purchase your dust-covered tokens. - Against Investment Principles:
Rational investment requires in-depth research, long-term stable follow-up, understanding the overview of the investment target, and maintaining a good emotional state for rational investing. It is important to remember that the path to instant wealth is an illusion; seeking long-term gains and maintaining rational investment is the best strategy.
If you often browse various news, communities, and social media related to Crypto Assets, you may have heard of the term “pump and dump.”
The concept of pumping and dumping in Crypto Assets originates from the stock market, referring to a large group of organized investors buying low market cap assets to influence and raise prices. Afterward, their goal is to quickly sell off the assets to realize profits, bringing the assets back to their previous value—often even lower. This practice seems to thrive in the realm of Crypto Assets, as while small-cap assets in the stock market may have a market cap of 100 million or 200 million USD, Crypto Assets are not subject to the regulations of traditional exchanges and often have much smaller projects—allegedly making these projects easier for criminals to manipulate.
However, to successfully implement all these kinds of frauds, it indeed requires a lot of effort. As mentioned earlier, the pump and dump scheme is just a scheme; to make a huge profit, it must be put into practice. We will explain why crypto assets pump and dump schemes are undesirable and detail the main aspects of the countless disadvantages of joining these fraudulent groups. In fact, if you join such scams, you could very likely end up in prison. Not to mention the psychological trauma and economic losses it can directly cause you.
Pump and dump is illegal.
This is unavoidable – although most countries do not regulate the practices of most Crypto Assets trading, including pump and dumping, the traditional strategy of pump and dumping small stocks below one dollar is completely illegal in most countries. This practice is considered to involve fraud and market manipulation, and those who implement pump and dumping schemes, once caught, typically face hefty fines or even imprisonment.
In the United States, due to the monitoring and management of the Securities and Exchange Commission (SEC), it is not uncommon for these violators to face four to five years in prison for participating in this specific market fraud. If they do not want to suffer imprisonment, they must pay fines, which often amount to millions of dollars. The regulatory penalties in some countries are even stronger, such as in Australia. The Australian Securities and Investments Commission (ASIC) typically sentences such scammers to up to 15 years in prison. It sounds really not worth it to suffer imprisonment for a bit of profit.
Although the above cases only target the pump and dump behavior in traditional stock markets, regulatory regulations against Crypto Assets scams are about to be introduced. The two countries mentioned above are both at the forefront of Crypto Assets policy, so these regulatory frameworks will sooner or later have a deterrent effect on Crypto Assets fraudsters; it’s just a matter of time.
You are not the shark, but the bait.
Most Crypto Assets pump and dump schemes appear on messaging social media platforms, such as in Telegram and Discord groups. When a new money-making scheme emerges, it seems like they’ve struck pure gold: all they have to do is pay attention to when to buy a specific Crypto Assets and then make a fortune. Sounds simple, right? As mentioned, it’s easier said than done.
Crypto Assets pump and dump eyewash schemes typically gather tens of thousands of group members before taking action. The group members pretend to anxiously await the announcement of the target coin, and then frantically buy. But the reality is: the real public is not involved in the scheme; on the contrary — they are the bait for the successful implementation of the scheme.
The true beneficiaries of this scheme are the group owners, who are the administrators that timely announce the correctness of the Crypto Assets to bait purchases. So why do they profit? Because they actually bought the assets weeks ago, sometimes months before announcing the purchases as group members. When the crowd frantically buys and sells, trying to find the right time to sell (which they never do), the creators of the eyewash have already sold their positions when the price is pumped — leaving the blindly following general public to clean up the mess, and usually, what awaits them is more losses.
Low liquidity can cause you to lose money.
A Crypto Asset with a market value of 1.2 million USD is obviously not as popular as Bitcoin and Ethereum, the latter of which has a market value in the hands of hundreds of millions.
In simple terms, there are far fewer people interested in low market cap Crypto Assets compared to high market cap Crypto Assets. Since the pump and dump eyewash relies on low market cap assets, most of the people interested in buying low market cap assets during the scam are participants in the scam.
This is one of the reasons why the perpetrators of these scams sold so early. Although their selling positions were ready and a large influx of investors made the assets extremely hot, once the dust settled and no one else bought them out, it became difficult for the scammers to sell. When joining a crypto pump and dump scheme, very few people consider this: you have to sell, but who will buy back from you? Most bait is trapped in low-value assets, waiting for a moment that may never come to sell without incurring losses. But the fact is, this is nearly impossible.
against investment principles
Whether it’s Crypto Assets, stocks, bonds, commodities, fixed income, or other types of financial management, investment should be taken seriously. Rational investment requires in-depth and careful research, long-term stable follow-up, understanding the overview of the investment targets, and maintaining a good emotional state and rational investment.
Crypto Assets pumping and dumping may sound like a way to gain high returns, but remember, the path to getting rich overnight is like a fleeting dream. Seeking long-term gains and maintaining rational investment is the best strategy. Otherwise, thinking positively, you might only lose a little profit, learning from your mistakes; thinking negatively, you could lose everything and even end up in jail. This is not worth it and is truly inadvisable. Therefore, do not let yourself get caught up in these eyewash schemes, but follow the path that all great investors have walked: in-depth research, long-term stable follow-up, and rational investment.
