WHAT IS A CRYPTO PUMP AND DUMP?
Cryptocurrency pump-and-dump schemes are commonly found on chat platforms such as Discord and Telegram. Large groups of users (2,000+) coordinate a targeted pump on thinly traded smaller market cap altcoins,. This leads to a window as small as 30 seconds for buyers to take profit. Nefarious tactics are often used, such as ringleaders in the operation pre-purchasing the coin to sell into their community’s buy orders for large profits.
Pump-and-dump schemes are mostly anonymous and are organized in public chat rooms or via mobile messaging apps. They are coordinated efforts to create phony demand (the pump) and then sell quickly (the dump) to profit by taking advantage of traders who are unaware of the scheme. This type of market manipulation occurs in the largely unregulated cash market for virtual currencies and digital tokens, and typically on platforms that offer a wide array of coin pairings for traders to buy and sell.
Customers should avoid purchasing virtual currency or tokens based on tips shared over social media. The organizers of the scheme will commonly spread rumors and urge immediate buying. Victims will commonly react to the currency’s or token’s rising prices, and not verify the rumors. Then the dump begins. The price falls and victims are left with currency or tokens that are worth much less than what they expected. From beginning to end, these scams can be over in just a few minutes.
Read in full : http://www.cftc.gov/PressRoom/PressReleases/pr7697-18
Original information: This is legalese for something not publicly available, i.e personal information of the pump-and-dump group ringleader(s) that can lead to their capture.
Successful enforcement action: The original information you provide must be sufficient to link the suspect in question to the pump-and-dump scheme, circumstantial evidence is not sufficient. More significantly, another parameter of successful is that the monetary sanctions listed must be recuperated from the perpetrator, not simply imposed.
Compensation only with monetary sanctions of $1 million or more: If you manage to provide original information, and that original information leads to successful enforcement action, and that leads to a “paltry” sum of $800,000 in monetary sanctions recuperated, you won’t see a dime for your efforts.
You could be eligible: This allows compensation to be issued solely at the discretion of the CFTC regardless if all the boxes above are ticked.
https://cryptoinsider.21mil.com/cftc-offers-bounty-on-crypto-pump-dump-whistleblowers/
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http://www.cftc.gov/PressRoom/PressReleases/pr7697-18