Middling cryptocurrency exchange YoBit has an unusual plan to attract more traders to its platform: randomly pump coins to artificially drive up their prices.
In a Tweet published this morning, the exchange, apparently based out of Russia, said that on Thursday it will inject 10 BTC (~$66,000) into 10 random markets.
“We will buy one random coin for 1 btc every 1-2 mins 10 times (total buy amount – 10 btc),” the exchange operator said.
Though not a large sum compared to the global crypto ecosystem’s estimated $12 billion in daily volume, it could lead to significant price increases in thinly-traded microcap altcoin markets.
Many Twitter users immediately questioned whether YoBit’s account had been hacked. However, this does not appear to be the case, unless the hacker also infiltrated the exchange’s website, which currently features a countdown timer for the self-described pump. Other users tagged the official Twitter accounts of regulatory agencies, alluding to the fact that the action could be illegal in many jurisdictions.
As CCN.com reported, the U.S. Commodity Futures Trading Commission earlier this year issued a customer advisory on cryptocurrency pump-and-dump schemes, warning that they may illegal. While it’s not clear if YoBit’s planned trading event quite meets that definition, it’s hard to imagine that it doesn’t qualify as some type of market manipulation.
Last week, CFTC Chairman J. Christopher Giancarlo said that the agency was “very focused on the fraud and manipulation aspects of cryptocurrency markets,” and the numbers bear out those facts. Per a Wall Street Journal report, cryptocurrency-related enforcement actions have contributed to a significant increase in the size of civil penalties exacted by the CFTC in 2018. In fact, the $900 million in penalties levied during the current fiscal year was actually larger than the amount levied by the CFTC during five out of the eight years of the Obama administration.
According to CoinMarketCap, YoBit currently ranks as the world’s 51st-largest cryptocurrency exchange, as measured by adjusted daily trading volume. The exchange has processed $19 million worth of trades across its 482 markets within the past 24 hours and has seen more than $918 million in volume over the past month.
CCN.com could not immediately reach YoBit for comment.
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Last modified: June 11, 2020 1:47 PM UTC