UCL develops tool to track crypto pump-and-dump schemes

A team at University College London has created a new tool called Perseus. This tool helps track people who manipulate cryptocurrency markets through schemes known as pump-and-dump. Cryptocurrencies are largely unregulated and risky for investors. The researchers identified about 500 key players, whom they refer to as masterminds. These individuals hype up certain coins to encourage others to buy. Once interest peaks, they sell off their own coins for a profit. The study reveals that Telegram, a messaging app, is often used for these schemes. Many conversations about buying and selling happen there. The team found that the masterminds have accomplices who help spread their messages, boosting the hype around the coins. Using Perseus, the researchers identified 438 masterminds. Together, these individuals are involved in about $3.2 trillion in fake crypto trading, earning around $250 million yearly. The researchers are concerned about how easily these schemes operate. They warn that as more people get scammed, regulation may become necessary to prevent a collapse of the crypto market.