It came straight from the horse’s mouth. Last week, an administrator in the official Mintcoin chatgroup on Telegram posted what Reddit commenters “velociraptor90” and “hockeyboy87” in the /r/Mintcoin forum have suspected all along. It was only 25 days ago when both Reddit users asked forum members what has been happening to the energy-efficient cryptocurrency given the traction it has been so far getting. “Velociraptor90” suspected a pump-and-dump scheme was responsible for Mintcoin’s increase in price while “hockeyboy87” responded it was the slow kind of pump-and-dump that was enacted. On March 23, the administrator of Telegram’s Mintcoinofficial chat group, Shane Kerr, confirmed and apologized that the eco-friendly point-of-stake coin indeed “seems to have been used as part of a pump and dump scheme”.
How does a pump-and-dump process work?
Due to the unregulated nature of cryptocurrencies, doing a pump (to increase the value of a digital currency) and a dump (to sell off a virtual currency at a high value thereby causing its eventual price fluctuation at a cost lower than its original price) is not at all illegal. But the same technique, if done in the stock market, definitely is.
Whether everyone who participated in the scheme actually earns profit is not known, what is sadly sure is the market manipulation inherent in the cryptocurrency market. The process is so prevalent, there are already a slew of accounts and groups in Telegram that proudly advertise themselves as blatant pumpers and dumpers. These groups actively do the scheme five times a week and advertise themselves daily in Telegram channels.
Their highly coordinated efforts are impressive. They tell members the time of the scheduled pump and where it will take place. The information on the digital coin they are to pump is only revealed minutes before the pumping is performed in order to produce purchases done at the same time. Immediately after the command to pump has been sent out, the price of the digital currency spikes.
As messages are sent through the rest of the channels about the price jump, the dumping begins. Since the high price is seemingly evident of a coin’s hotness – and that it promises a big return – a wave of buying occurs followed by immediate selling thereby declining the price of the coin.
According to Ben Yates, a fintech lawyer at the RPC law firm, effective regulation is necessary in order to prohibit these schemes from happening. He explained, “The reality is that unless and until effective regulation is brought to bear, pump and dump cryptocurrency scammers will continue to get away with it.”
The light at the end of the Mintcoin tunnel
Fortunately, Mintcoin is able to keep itself fresh and strong despite being taken advantage of. As recent as ten days ago, Mintcoin holders, fans, and enthusiasts have more than enough reason to rejoice. An official Mintcoin whitepaper is currently available on the new and sleeker Mintcoin website. The whitepaper introduces Mintcoin, its history, and the problems Mintcoin will address and resolve. Questions frequently asked by users are also detailed in the whitepaper, while a “living roadmap” process is similarly described. The roadmap outlines the priorities of the Mintcoin community as well as how funds will be allocated in order to develop them.
Shane Kerr, the admin of Telegram’s official Mintcoin chat group, announced the addition of a developer who is set to join and assist Mintcoin in creating a lightweight wallet. So far, the goals set are to build a macOS wallet and a 64-bit Windows wallet. Kerr similarly let users in on how this will be done: using an Apple machine or renting a macOS Virtual Private Server (VPS). Mintcoin plans to announce the release of the new wallet by the end of this month.