Few people thought after the ICO hype of 2017 that there would be another successful year for ‘pump and dump’ tokens. Create a hype with misleading stories, so that investors buy your tokens en masse. This was also in the year 2022 with $ 4.6 billion in investments according to Chainalysis another ‘success formula’.
9,900 pump and dump tokens
Chainalysis dived into the numbers and analyzed all tokens launched in 2022 on the BNB Smart Chain and Ethereum. According to the blockchain analysis company, it showed that a total of 9,900 tokens have been launched with the characteristics of a pump and dump project.
We speak of a pump and dump if there is initially a nice misleading story around the token, which creates a hype, which then creates FOMO (Fear of Missing Out) that persuades the investors to buy the tokens.
At those times, it is precisely those who started the project who dump their tokens. You often see a gigantic upturn in the chart in the first few days, which is immediately answered with a sharp correction.
Dangerous individual
Chainalysis managed to identify one person who single-handedly managed to launch 264 pump and dump tokens. “Teams launching new projects and tokens can remain anonymous, making it possible for ‘series pump and dumpers’ to repeat the trick several times.