Bittrex, which currently stands at the world's third-biggest cryptocurrency trading platform, recently sent out an email to its user base cautioning users about scams aimed at manipulating the cryptocurrency market. The email followed shortly after Business Insider reported that so-called “pump and dump” scams were active on the Bittrex exchange platform.
In its email, the firm alerted users to certain policy changes aimed at enhancing the user’s experience on the platform. One such policy stated that any Bittrex user found guilty of being involved in any price manipulation of any coins would be immediately banned and the user's accounts would be frozen. Bittrex firmly stated their opposition of any market manipulation scams, especially those active on their own platform.
In early November, Business Insider reported that certain traders were using the app, Telegram, to plot to inflate cryptocurrencies’ prices on various exchange platforms, including Bittrex and Russia-based Yobit. The traders planned these scams in order to quickly sell their holdings during price increases to make a profit.
According to lawyers, who were asked to contribute their opinion to the report, this scam was a basic market manipulation approach. Since the cryptocurrency industry still has no official regulatory framework in most countries, the industry can easily fall victim to such techniques. However, in traditional investing ventures, this activity has become prohibited.
A Bittrex spokesperson confirmed that they intend to review their policies and update accordingly to provide users with a better and safer experience. The firm recently drew Bittrex users' attention to certain policy updates. New policies included the removal of orders older than 28 days and a requirement for a larger minimum trade size. The email also reminded users that any market manipulation would be met with severe action.
While Bittrex’s crackdown on 'pump and dump' scams have increased, not all groups have been discouraged. One group in particular, called 'trading signals for crypto', still planned to cause a price pump on the Bittrex platform. The group, with over 7,000 members, planned to launch its campaign earlier this week.
Bittrex is currently the third-largest cryptocurrency exchange platform in the world, going by daily trading volumes. The platforms, which was established by Amazon security experts, trades around $1 billion on a daily basis.
Cryptocurrencies enjoyed unprecedented success and a growing sense of popularity amongst mainstream users. This is partly due to the rise of initial coin offerings (ICOs), which allows startups to generate capital quickly and easily. Once an investor partakes in an ICO, the company issues a digital coin in proportion to the user’s investment, which can later be exchanged or kept by the user.
Currently, the cryptocurrency total market cap stands around $300 billion, with just over 1,300 different cryptocurrencies contributing to the growing number. Considering the cryptocurrency’s skyrocketing growth trajectory, it’s easy to see why this industry will become targeted by an array of various hacks and scams in the future.
Since the emergence of pump and dump scams, several cryptocurrency management teams have confirmed that they’ve fallen victim to a scam of this nature. Both ChillCoin from Belize as well as Indorse from Singapore have expressed their concern at the fact that their issued coins have fallen victim to market manipulation. So fat the firms themselves remain free of suspicion in being involved in the hacks.
Despite their warning email to users, it is unclear how large exchange platforms such as Bittrex aims to discourage the harmful practice on their platforms. While Bittrex did state in their email that any user caught to be involved with market manipulation would be blocked from the platform, it is not yet clear how they will monitor suspicious activity. Pump and dump scams are likely to haunt the cryptocurrency industry until such time that the market becomes more regulated.
In its email, the firm alerted users to certain policy changes aimed at enhancing the user’s experience on the platform. One such policy stated that any Bittrex user found guilty of being involved in any price manipulation of any coins would be immediately banned and the user's accounts would be frozen. Bittrex firmly stated their opposition of any market manipulation scams, especially those active on their own platform.
In early November, Business Insider reported that certain traders were using the app, Telegram, to plot to inflate cryptocurrencies’ prices on various exchange platforms, including Bittrex and Russia-based Yobit. The traders planned these scams in order to quickly sell their holdings during price increases to make a profit.
According to lawyers, who were asked to contribute their opinion to the report, this scam was a basic market manipulation approach. Since the cryptocurrency industry still has no official regulatory framework in most countries, the industry can easily fall victim to such techniques. However, in traditional investing ventures, this activity has become prohibited.
A Bittrex spokesperson confirmed that they intend to review their policies and update accordingly to provide users with a better and safer experience. The firm recently drew Bittrex users' attention to certain policy updates. New policies included the removal of orders older than 28 days and a requirement for a larger minimum trade size. The email also reminded users that any market manipulation would be met with severe action.
While Bittrex’s crackdown on 'pump and dump' scams have increased, not all groups have been discouraged. One group in particular, called 'trading signals for crypto', still planned to cause a price pump on the Bittrex platform. The group, with over 7,000 members, planned to launch its campaign earlier this week.
Bittrex is currently the third-largest cryptocurrency exchange platform in the world, going by daily trading volumes. The platforms, which was established by Amazon security experts, trades around $1 billion on a daily basis.
Cryptocurrencies enjoyed unprecedented success and a growing sense of popularity amongst mainstream users. This is partly due to the rise of initial coin offerings (ICOs), which allows startups to generate capital quickly and easily. Once an investor partakes in an ICO, the company issues a digital coin in proportion to the user’s investment, which can later be exchanged or kept by the user.
Currently, the cryptocurrency total market cap stands around $300 billion, with just over 1,300 different cryptocurrencies contributing to the growing number. Considering the cryptocurrency’s skyrocketing growth trajectory, it’s easy to see why this industry will become targeted by an array of various hacks and scams in the future.
Since the emergence of pump and dump scams, several cryptocurrency management teams have confirmed that they’ve fallen victim to a scam of this nature. Both ChillCoin from Belize as well as Indorse from Singapore have expressed their concern at the fact that their issued coins have fallen victim to market manipulation. So fat the firms themselves remain free of suspicion in being involved in the hacks.
Despite their warning email to users, it is unclear how large exchange platforms such as Bittrex aims to discourage the harmful practice on their platforms. While Bittrex did state in their email that any user caught to be involved with market manipulation would be blocked from the platform, it is not yet clear how they will monitor suspicious activity. Pump and dump scams are likely to haunt the cryptocurrency industry until such time that the market becomes more regulated.