Pump and Dump

In a pump and dump (PnD), organizers acquire an asset, promote it with deceptive or undisclosed claims, and sell into the demand they helped create. Later buyers bear the losses if demand disappears. The defining feature is coordinated deception and distribution—not every rapid price rise followed by selling is a pump and dump.

Coordinated messaging groups, undisclosed paid promotion, fake announcements, wash trading, or misleading charts can create apparent momentum. Thin order books and concentrated ownership make the price easier to move and give insiders more influence over the exit.

Warning signs include unverifiable news, anonymous coordination groups, guaranteed-return claims, undisclosed incentives, concentrated supply, and little liquidity beyond one venue. Check primary sources, order-book depth, token distribution, unlocks, and whether promoters disclose their holdings or compensation.

Market-manipulation, fraud, advertising, and securities rules may apply, but the asset classification, conduct, venue, and jurisdiction matter. This glossary describes the pattern; it does not determine the legal status of a specific case.