What is a pump and dump? How price-rigging scams work
By SendPay Business · · 2 min read
- 1Add your photo ID
- 2Add proof of address
- 3Checked and verified
A pump and dump is a scam where a group buys a cheap, little-traded coin or share, hypes it up to push the price higher, then sells everything at the top. The price collapses and the people who bought on the hype are left with the losses.
How it works
- Promoters quietly buy a small, thinly traded asset.
- They hype it on social media, chat groups or paid promotions.
- New buyers pile in and the price shoots up.
- The promoters sell into the rush, and the price crashes.
Warning signs
Sudden hype about an obscure coin or share, promises of quick gains, pressure to buy right now, anonymous promoters, and a price that jumps without any real news are all red flags.
Try it
Name your platform and watch it come to life
Type a name, tap a colour and pick what it does. The phone changes as you go.
Colour
What it does
Design and preview your whole platform free, then launch when you are ready.
Is it illegal?
In regulated stock markets, pump and dumps are market manipulation and are illegal in the UK, US, EU and most other places. In crypto the picture has been patchier, but rules such as the EU's MiCA now include market abuse rules for crypto assets.
Where SendPay fits
If you run a crypto platform, protecting your customers from scams builds trust. A SendPay Crypto Exchange platform lets your customers buy, sell and hold crypto in your own branded app, with assets held with regulated partners.
How it works
Your own money app- 1Name it and pick your colours
- 2Choose what it does
- 3Launch when you are ready
Why sign up
Create your free SendPay account
It's all about creating your own financial platform with ease. Start with a free account today.
- 🪪A free business accountOpen it in about a minute with your business name, email, password and mobile. No card and no documents to start.
- 💳Get paid from day oneTake card payments, and share your own payment link and invoices so customers pay in a click.
- 🌐A free business websiteFree to build, free to publish and free to keep, with unlimited visits.
- 🚀Your own financial platformDesign and preview your whole platform free, then launch when you are ready.
SendPay Business is a technology company, not a bank. Accounts, cards and payments are powered by licensed partners.
Questions people ask
What market cap would a price target need?
Work out a coin's market cap and the price it would need to match another.
Crypto market cap calculator →Can I launch my own crypto exchange?
Yes, a branded app where customers buy, sell and hold crypto.
Crypto exchange platform →Read next
Spotted a mistake or something out of date? and we'll fix it. How our guides are made
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.