Web3 Pump-and-Dump Schemes Could Pose Risks for Investors in Dominant Cryptocurrencies

Key Points

1. Web3 pump-and-dump schemes manipulate token prices through coordinated buying and selling, often using exaggerated information to lure investors.

2. The decentralized and anonymous nature of Web3 platforms, along with 24/7 trading and easy token creation, makes them highly vulnerable to these scams.

3. Operation Token Mirrors resulted in the seizure of $25 million and charges against 18 individuals, indicating increased regulatory scrutiny.

4. Investors can protect themselves by being skeptical of unsolicited advice, researching project legitimacy, and avoiding high-pressure investment opportunities.

5. Common red flags include unrealistic return promises, heavy social media promotion by unknown accounts, and lack of transparent project information.