Anatomy of an ICO Pump and Dump

Recently I wrote a column that talked about the hidden costs of an ICO and a list of large news and ICO listing resources. I’m currently running my own ICO called SAAVcoin in addition to being a technology writer that has covered other ICO’s. We hear a lot about the ICO scams running around, and there are a ton of them, either intentional or well meaning but doomed to failure ideas, it appears that only 1 in 10 of these blockchain companies will actually produce anything. So those scams are fairly obvious, but the less obvious ones are on the other side of the wall. Look at this email (the 5th of its kind I’ve gotten so far) on the Bitcoin Talk forum just this morning:

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Hello,

Would you like to bump your ICO ANN thread and bounty thread always?

We have +100 bitcointalk accounts and we can making 100s of good comments to your threads and bumping it to receive the most possible of traffic.

Here is the details of our offer

400 good comments about them project + 100 on bounty thread = 1 btc

1000 good comments about them project + 300 on bounty thread = 2 btc

2500 good comments about them project + 600 on bounty thread = 3 btc

If interested kindly PM me back.

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Assuming these 5 people are different and they are all telling the truth, then there is over 500 fake profiles on Bitcoin Talk that do nothing but artificially promote ICO’s. At todays pricing, their biggest package costs $22,000. That doesn’t even touch all the ICO news and listing sites where they charge from $100 to $10,000 just to put a simple listing on the site. Ignoring all the obvious scams in the various crypto facebook groups where the posters comes in and says “Make 1btc a day with this guaranteed technique, ask me how”, it means most of the information you are getting is paid for. I was actually asked to write up the case study for my own ICO for a number of sites so they could pass it off as their own analysis. All this brings me up to the weirdest situation that has happened, and I’m still not sure if it is fake or real.

About a month ago this guy shows up in a crypto group on facebook and is asking about altcoins and investments, he’s in a middle eastern country. So I chat with him, he really knows nothing about ICO’s and stuff, so I direct him to some resources to learn about it. A few weeks later and this guy is already doing investment groups and has obviously taken time to get educated, so I approached him again now that he was informed on the topic. We went back and forth for a week on my ICO and then he comes to me with an offer. Our ICO is $7.5 million and he offers to have his investment group buy 80% of it, or $6 million. Since we are a game and this is the in game currency, that’s ok, it still leaves plenty free and the price will still adjust with the market of supply and demand. Then comes the conditions.

He wants a finders fee that works out to $300,000, well, that’s a lot of money, but I figure we can still talk and see where this goes. He tells me he has already done this with Hextracoin a few weeks ago, if you don’t know, they have a lot of negative press as a MLM scam but this article also says there was sudden interest, so I’m wondering if it is this guys group. He tells me his group is going to buy into Ucoincash which also looks pretty questionable, but I’d already seen him starting to promote it on Facebook. At this point I feel pretty good that my company is way more legit and has a way more clear use case. So, the conditions, our friend wants a $3,000 advance on his commission. Now in the scheme of all this money, that’s a small amount, but why on earth are you going to insist on $3,000 suddenly at the expense of getting $300,000 if you are running a legit investment? What has/had me perplexed, is that he seems to clearly be doing PR activity on these other ICO’s to try and raise the price up, so that would seem to indicate he does in fact have the tokens, so he probably did those deals, but if he is so good at this, then why throw away the 300k he’d get in a week to get 3k today? At the end of it all, he asks me to let him know once we’ve sold 30% of our tokens, not sure why, but maybe they really do have money, however the investment in the questionable tokens to pump and dump is weird, I’m not even sure how they’d do it. They’d have to keep the interest high till after the point the tokens are on an exchange and then sell off as fast as possible. I’ve pasted some of the conversation that took place on facebook below: