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What happened?
A recent study by researchers from Cornell University has revealed that around 440 individuals are responsible for orchestrating massive pump-and-dump schemes in the cryptocurrency market. Using a tool named PERSEUS, these researchers were able to identify and track these “masterminds” behind the schemes across various cryptocurrencies. The study’s findings highlight the vast scope of artificial trading conducted by these few individuals, significantly impacting crypto prices.
Who does this affect?
The manipulation affects both small and large investors in the cryptocurrency market, who might suffer substantial financial losses due to artificially inflated prices. Cryptocurrency exchanges, especially decentralized ones, are also impacted as they become platforms for these fraudulent activities. Regulators are concerned as well, facing increased pressure to monitor and curb such activities to protect market integrity.
Why does this matter?
This revelation has significant implications for the crypto market, noting a 167% surge in trading volumes during these manipulations. Such activities undermine confidence in the market, leading to potential regulatory crackdowns and increased scrutiny on cryptocurrency trading practices. The integrity of the crypto market is at stake, which could influence investor behavior and overall market dynamics.
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