The US Futures Trading Commission (CFTC) published a two-page newsletter on the so-called "pump and dump" schemes. In addition to a brief description of the history of such frauds, there is an announcement of potential rewards for individuals who are ready to act as informants of such activities.
Note that "pump and dump" is a kind of market speculation in which a group of persons intentionally manipulates prices for an asset (in this case, a crypto currency) in order to artificially inflate its value and then sell it quickly. According to the CFTC, this kind of illegal activity is very well known and old as market itself. It has been a dramatic catalyzer of some of the major economy crisis around the world in the past. A strong law base gave a good fight to pump-and-dump-ers for many decades of stock exchange, however, crypto is the youngest market out there, suffering from insufficient ‘care’ from financial authority’s.
Pump and dump schemes appeared much earlier than virtual currencies and digital tokens. Historically, this was the prerogative of the so-called "boiler rooms", which aggressively promoted joint-stock companies through false promises of an early breakthrough, the release of a revolutionary product or merger with major competitors. Along with the demand for securities of these companies, stock prices also grew. When they reached a certain point, the "boiler rooms" sharply sold all their papers, after which the exchange rate fell off, and investors remained with the depreciated assets.
Remember recent BitConnect crypto-currency fall, that is right, same story, scammers took the money after a series of aggressive marketing campaigns and pump and dump activity.
According to the CFTC, today this process has become easier and more destructive. For example, social networks and online chats allow you to spread the message and coordinate the actions of thousands of people (hamsters).
To protect yourself from the schemes of "pump and dump", the CFTC recommends not buying crypto-currencies based on advice only, especially in social networks.
In addition, do not trust ads and sites that offer quick and risk-free earnings on digital assets.