The Web3 industry is once again facing a wave of manipulations — this time they have become even more sophisticated. At the center of these schemes are fake news, deepfakes, and pseudo-legends spread on social networks. The goal is to create hype around a token, lure investors, drive up the price, and then suddenly dump the asset, leaving participants with devalued coins.
The classic scheme in the new reality
The scenario is familiar, but now it works faster and more aggressively. Pump and dump in Web3 takes place in four stages:
- Pre-launch: a token is created with minimal value. A Telegram channel, Discord, and sometimes supposedly ‘technical documentation’ appear. Rumors are seeded and the first victims are gathered in the presale.
- Launch: influencers, viral tweets, and YouTube videos are activated. Deepfakes featuring public figures are often used to add credibility. At this stage, the price begins to rise rapidly.
- Pump: the flow of fakes intensifies. They talk about ‘partnership with Apple’, ‘listing on Binance’, or ‘guaranteed returns’. The token soars, buyers chase profits.
- Dump: when liquidity and price reach the desired level, organizers massively sell off their shares. The price collapses within minutes. Investors are left holding a worthless asset.
Why this works in Web3
Lack of regulation, full anonymity, and the ability to trade 24/7 make Web3 an ideal environment for such manipulations. Tokens can be created in a couple of minutes, listed on a DEX, and promoted. In 2024, over a million tokens were launched on just one platform, Pump.fun — most of them created for speculation.
Scammers use Telegram, Discord, and private chats to coordinate actions. Even if the police want to intervene, it is hard to find the culprits — everyone hides behind pseudonyms.
Real cases and consequences
In October 2024, US authorities conducted Operation Token Mirrors. Assets worth $25 million were frozen, and 18 people were arrested on charges of creating fake tokens and money laundering.
However, such investigations are still rare, and the schemes are only gaining momentum. The University of Bristol, in one study, estimated that some tokens became targets for pumps more than 90 times over four years.
How to protect yourself
Pump and dump schemes are increasingly disguised as legitimate startups. Below are a few rules to help you avoid getting caught:
- Don’t trust unknown advisors. Anyone who messages you privately with a ‘hot tip’ is likely trying to sell a token before the dump.
- Be careful with advertising. Loud banners and videos featuring celebrities often use deepfakes. If it sounds too good to be true, it probably is a scam.
- Verify information. Study the team, the project’s white paper, and developer activity. If there is nothing — it’s not worth investing.
- Diversify. Don’t put everything into one token, especially if the founders promise ‘explosive growth’. It’s better to spread your capital and reduce potential losses.
- Avoid FOMO. The pressure to ‘get in before listing’ is a classic pumper trick. Real projects are not afraid of questions and operate transparently.
What’s next?
While regulators are only starting to approach Web3, investors have to protect themselves. New technologies — deepfakes, bots, and generative content — give scammers even more tools. But critical thinking, common sense, and basic security hygiene remain the strongest tools for protection in the wild world of cryptocurrencies.
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