Discord is a perfect vehicle for these pumps, as a semi-public forum that allows users to advertise servers broadly, ping users about coordinated buy-ins, and discuss strategy. I’m a longtime Discord user, and anecdotally I’ve seen an enormous uptick in activity. Between early April and May, I received 47 invitations to join crypto pump groups over Discord. Eight of the groups have more than 20,000 members; the largest has over 80,000. Several of these servers’ moderators say they pay people—whom they call “advertisers”—to spam Discord users with invitations, sometimes including crypto giveaways.
New members are greeted with FAQs describing 2,000 percent pumps and the potential for hundreds or thousands in gains. That’s not necessarily the reality. “The Discord server is a casino. As the saying goes, ‘The house always wins,’ and they’re the house,” says Thomas Hurley, 21, a member of several crypto pump Discord servers. After crypto evangelists began joining his gaming servers to advertise pump groups, he tried his hand at a couple coordinated price pushes. He never made much profit, but other people did. When Hurley began looking closer at some of these coins’ market trading pages on sites like Binance, he noticed some interesting patterns.
“A few seconds before they announced which coin to pump, there would be a huge spike,” he says. It looked like someone in the know bought up a lot of the coin beforehand, hugely boosting their potential to earn big by selling early. Hurley never had a chance.
He isn’t alone. A 2018 study of Telegram-based pump groups found that five minutes before the pump signal (before the coin is even revealed), a designated coin’s price shot up about 5 percent. Back then, on average, only investors who bought in within the first 20 seconds after a pump could make a profit. Today, sources say, crypto pumps move so quickly that enthusiasts commission bots to buy and sell coins based on Discord announcements. The owner of one server, Pump It Up, says he lost several hundred dollars because he wasn’t using a bot, which can buy and sell within milliseconds. The experience prompted him to make his own group back in February.
“Crypto pumps prey on less-informed people in the space,” says Josh Kamps, a PhD candidate at University College London studying crypto fraud. People who found out about GameStop late want to jump on the next big thing. Kamps noticed, anecdotally, that a bunch of low-utility alt-coins cropped up right around then, which he says are “pretty much designed to be pumped.” For example, he says, pump groups are flocking to Shiba Inu Coin (or SHIB). One knock-off WallStreetBets pump group advertises that they pumped SHIB for more than 4 times profit. In the last 24 hours, the meme coin saw over $6.1 billion in trading volume.
“Discord welcomes a broad variety of personal finance discussions, including cryptocurrency, investment clubs, and day traders and encourages…
Read more:GameStop FOMO Inspires a New Wave of Crypto Pump-and-Dumps
