Top Performing Cryptocurrency of 2019 Suspected of Market Manipulation: Report

Chainlink [LINK], one of the best performing cryptocurrencies of 2019 has been alleged of “pump and dump” trading by Blockchain research firm AnChain. According to their report, a small number of addresses conducted vast volumes of trading. Moreover, there were attempts to hide the identity of the traders as well. 
Victor Fang, CEO of AnChain.ai told the media,
“We are confident that our research is illustrative of artificial market manipulation as it involves a small number of addresses accounting for a hugely disproportionate transaction volume over a short period of time, and that these transactions were subject to various forms of obfuscation and concealment atypical of legitimate market activity,”
The price of LINK rose from about $0.5 to reach an All-Time High of $4.54. The bullish move was a rare instance among altcoins.
Chainlink Daily Price in 2019 (CoinMarketCap)
According to Anchain, the parabolic move was a classic pump and dump scheme initiated on 28th June. After that, when the price was high enough, the large addresses began unloading their holdings. The report sites that “One address sold 4.2 million tokens from July 2 to July 15.”
Link Token is trading 50% lower from the levels attained during early July when the suspected sell-off began.
Furthermore, after attempted to conceal the identity using ‘jump addresses,’ the tokens were transferred to Binance for trading.
On Coinbase Effect
As reported on 29th June on Coingape, the token gained about 58% apparently due to Coinbase listing. The media also questioned Anchain, as ‘coinbase effect’ has influenced in the past as well. It was also evident with Tezos [XTZ] this year.
However, according to them, “the pump-and-dump data appears to precede the CoinBase debut of the Link token.” The whale buys and sell orders with concealment suspects clearly of a ‘pump and dump’ scheme.
Market manipulation like these come under micro frauds conducted by high volume traders which affect low Mcap assets. On Monday, the Chairman of the SEC in the US had raised concern on this issue affecting the entire industry. Crypto ETFs and other products have been delayed due to market manipulation and security issues.
Therefore, measures to control fraudulent activities in the crypto markets should be one of the primary targets of the community as well.
Do you think that Coinbase timing accentuated the pump and dump scheme? Please share your views with us. 
The post Top Performing Cryptocurrency of 2019 Suspected of Market Manipulation: Report appeared first on Coingape.
Source: CoinGape

Crypto Market Wrap: Minor Recovery in $5 Billion Bounce

Market Wrap
Crypto markets recover yesterday’s losses but not much more, Ethereum, EOS, NEO and Maker putting on the most.
A minor rebound has occurred over night which has pushed total market capitalization back over $120 billion. It is nothing to get excited about though as things are still way down on the week and the fifteen day old year.
Bitcoin clung on to support at the $3,600 by its digital fingernails for a day before one ‘Bart shaped’ pump sent it back to $3,700 again. The trading range has been maintained for now and Bitcoin is still sideways on the four hour chart for the past couple of weeks. Since the big dump a month ago today BTC has made 15%.
Ethereum has bounced back a little better with an 8% gain on the day taking it just below $130. Constantinople is due tomorrow and the hard fork could usher in more short term gains for ETH. The gap to XRP in second has now shrunk to just $200 million as Ripple’s token only managed to claw back 2.5% on the day.
Altcoins in the top ten are all green at the time of writing with Ethereum leading the bounce. EOS has made the next best move gaining 6% back over the past 24 hours to around $2.45. Bitcoin Cash, Litecoin and Tron have all recovered 4-5 percent on the day, Bitcoin SV has hardly moved.
Neo and Maker are driving gains in the top twenty right now with 6-8 percent. Cardano, Iota, Binance Coin and Monero are adding around 5% each at the time of writing.
Augur and Quarkchain are getting a big dose of fomo today as they both pump over 25%. WAX and Chainlink are also posting double digit gains during the Asian trading session. There are very few altcoins in the red right now aside from ODEM and a couple of stablecoins dropping fractions of a percent.

Total crypto market capitalization has bounced over 4% back from yesterday’s dump. The $5 billion lost has just come back in to crypto, probably from the same players by the looks of the unnatural vertical steps on the charts. Pump and dump culture is alive and kicking again on crypto markets which are still in their range bound channel.
Market Wrap is a section that takes a daily look at the top 20 cryptocurrencies during the current trading session and analyses the best-performing ones, looking for trends and possible fundamentals.
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Crypto Volatility Returns, Is It a Sign of The Market Bottom?

Back in the latter half of 2017 many of the cryptocurrencies experienced wild price swings with double digit pump and dumps several times a week. This volatility was seen to be the detractor of wider spread adoption, though easy to make, or lose, a quick buck for day traders and speculators.
Then the bears got hold of markets and smashed them for the duration of 2018 before things started to level out at what many thought was the bottom. Another big dump occurred in November sending crypto markets further back to a yearly low of $100 billion total market capitalization.
In the past couple of weeks, however, that pattern of pumping and dumping has resumed which could be a possible indicator that markets have found their bottom. Since the big slide last month, which resulted in 50% of the market being wiped out in less than ten days, crypto markets have been up and down like the proverbial yoyo.
Market capitalization has been pretty much range bound between $100 billion and just below $150 billion, which is 50% of the entire market. Chart patterns are displaying unnatural spikes indicating that whales could be loading up and then dumping again just as quickly.
Another Big Pump Follows a Big Dump
Just a few hours ago one of these pumps occurred as $10 billion flooded into crypto markets in less than an hour. Yesterday markets dumped $5 billion.
Market cap surged from $121 billion to $131 billion at 15.30 UTC. After dumping double digits just a day or two some of the major cryptocurrencies are pumping similar amounts again today.
Ethereum, Bitcoin Cash, EOS, and Litecoin are all up over 15% on the day at the time of writing. Earlier in the week BCH dumped over 20% in a single day and the rest were not far behind. Could this pump and dump volatility be a sign of the market bottom?
It is too early to tell at the moment since this type of activity has only been occurring for the past few weeks. Big swings in prices and higher daily trade volumes indicates that interest is returning to crypto following several months of lethargy. This may only be interest from speculators and day traders but that was the case before the big bull-run last year.
Of course if we had a crystal ball we would all be loading up on rock bottom priced crypto assets safe in the knowledge that they won’t be dropping any further. Unfortunately for us in crypto land, it is a luxury we do not have, all we can do is keep guessing and reading those wild predictions.
 
Image from Shutterstock
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Study: Pump and Dump Schemes have Negligible Effect on Crypto Markets

A study by the Massachusetts Institute of Technology has revealed that machine learning can identify crypto pump and dump schemes before they happen. It arrived at a figure generated by fraudulent trading which is a tiny fraction of the total trade volume.
$7 Million Monthly Volume From Pump and Dumps
The study went on to reveal that there are at least two pump and dump schemes per day which generate $7 million in trade volume per month. NewsBTC’s daily crypto market wrap often identifies a random altcoin that is pumping for no apparent reason. However, in the grand scheme of things this figure is negligible when compared to a daily trade volume of around $15 billion.
In February the US Commodity Futures Trading Commission (CFTC) issued a specific warning about these types of scam, and regulators have begun to actively pursue the perpetrators. According to the regulator these schemes are considered as securities fraud. Research carried out at Imperial College London looked into pump and dump schemes in detail in order to develop an algorithm that can detect them.
The report highlights how pump and dumps are orchestrated as the organizer quietly accumulates an obscure altcoin before announcing a pump is about to begin on social media. Once the announcement, usually on Twitter or Telegram, has been made traders load up buy orders and the price begins to spike. The organizer then sells off his stash as the pump reaches a peak resulting in a dump back to previous levels.
As an example the researchers studied a single pump and dump scheme that occurred on November 18. The Official McAfee Pump Signals channel with over 12,000 members was monitored to glean details on the scheme. The chosen altcoin was BVB, worth around 35 satoshis at the time.
“We notice that the first buy order was placed and completed within 1 second after the first coin announcement. After a mere 18 seconds of a manic buying wave, the coin price already skyrocketed to its peak,” said the researchers noting a peak of 115 sats.
The speed of the operation was key as anyone entering the trade after around 18 seconds would not have made a profit. This was just one example but the study noted 236 other pump-and-dump events that took place between July 21 and November 18. The researchers used the historical data from known pump and dumps to train a machine learning algorithm to identify signs that a one is about to occur.
Cyptocurrency scams are not likely to go away anytime soon so identifying and being aware of them is all part of the evolution of this ecosystem. A few people make a little money out of pump and dumps but the effect on the market as a whole is negligible.
Full study can be found here: https://arxiv.org/abs/1811.10109
Image from Shutterstock
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