Crypto Influencers Reported To FBI & SEC For Orchestrating 'Pump And Dump' Schemes

Crypto Influencers Reported To FBI & SEC For Orchestrating 'Pump And Dump' Schemes

Francisco Memoria
  • A group of cryptocurrency traders and analysts was caught orchestrating massive pump and dump schemes.
  • In these, they planned on using their social media influence to dump cryptocurrencies on their followers.
  • The case has been reported to federal authorities.

A potential member of cryptocurrency analyst group Bitcoin Bravado has recently revealed some of the group’s members, along with other influencers, were seemingly orchestrating pump and dump schemes, in which they take advantage of their large social media influence. He claims to have reported the case to the Financial Bureau of Investigation (FBI), and to the Securities and Exchange Commission (SEC).

According to screenshots shared on blockchain-based social media platform Steemit, Bitcoin Bravado’s members essentially pick cryptocurrencies with potential, and arrange ways to buy large amounts of their currently circulating supplies, to be able to control their order books.

Per the provided screenshots, the group’s members attempted to initially manipulate a cryptocurrency called Haven Protocol (XHV), which at press time has an $8.5 million market cap. The plan seemed to include a large number of individuals, as seen in the screenshot below.

CryptoMedicated               CryptoMedicated

The cryptocurrency, at the time the screenshots were taken, had a market cap of about $1.6 million. The schemers’ goal was to buy around 15 percent of its supply, to the market and subsequently add it to exchanges while accumulating more. Once they got to 20 percent of XHV’s supply, they’d pump the cryptocurrency to dump it on other traders for a profit.

Their plan with XHV had to be dismissed, as the cryptocurrency’s price surged, making the move expensive. The traders and influencers considered various cryptocurrencies throughout the conversation.

When one blatantly revealed they were manipulating the market, another influencer stated this wasn’t the best term to use, making him correct it to “market making.” The whistleblower, going by CryptoMedication, revealed he was vetted to become a member of Bitcoin Bravado, but eventually decided against it upon witnessing the pump and dump conversation.

At the end of his post, CryptoMedication claims he has already contacted the SEC, the FBI, and other federal authorities regarding the pump and dump schemes being orchestrated. He added:

“I have all intentions of making an in-person visit either today (April 25th, 2018) or tomorrow to deliver all of these screenshots.”

CryptoMedicated

He further revealed his motivation was to get rid of similar moves on the crypto space. Pump and dump schemes usually involve the scammers dumping a large amount of tokens on unsuspecting investors looking to get in on the hype – which are then known as bagholders – and are illegal in regulated markets.

Bitcoin Bravado Responds

Bitcoin Bravado came under fire, as some of the schemers reportedly work for it, and one even claimed he would add the XHV token to its newsletter, presumably to dump the token on the group’s followers.

Bitcoin Bravado’s response came in a 16-page document that claims a few of the members shown in the screenshots are “friends and supporters,” but don’t actually create any content, nor have any equity in the company.

The company’s document further adds that it’s never been paid to promote any cryptocurrency to its followers. It reads:

“You also won’t see any proof on the charts that coins we mention have any significant price action following a post. Pump and Dump is beyond a stretch, its defamation and profoundly untrue.”

Bitcoin Bravado

The document goes on to show various messages traded between the group and CryptoMedication. These show the latter was demoted from “analyst” at the group, and that the conversation completely derailed from that point on.

What’s clear, is that crypto influencers and traders attempted to pump several cryptocurrencies on the provided screenshots. The case is now reportedly in the hands of federal authorities, who will decide if someone is or isn’t responsible.

It’s worth noting that the US Commodities and Futures Trading Commission (CFTC), offers a bounty of 10 to 30 percent of monetary sanctions imposed on schemers to whistleblowers who turn in those who orchestrate pump and dumps.

CryptoGlobe reached out to both CryptoMedication and Bitcoin Bravado, but neither replied to a request for comment before press time. This piece will be updated if we get a reply.