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Cryptocurrency exchanges are rife with "pump and dump" scams that would be illegal in most markets and leave unsuspecting investors at risk of large losses, a Business Insider investigation has found.
Crypto traders are using the secure messaging app Telegram to orchestrate the scams. Their strategy is to suddenly inflate the price of a cryptocurrency by coordinating a few buyers to act at specific times.
Then, after the price rises, they attract other, unwitting investors to buy into the price momentum. The "pumpers" quickly sell the coin to make a profit. The coins often crash just minutes after the initial surge, leaving the second wave of investors with losses. See how the strategy works here.
In Wall Street news, Goldman Sachs' new online lending business just hit a $2 billion milestone. Nasdaq's under attack over a product that could expose big traders — but one rival says it has been doing this for years. And one of the largest hedge funds in the world is ready to add bitcoin to its "investment universe."
Something "very unusual" is happening in markets, according to Deutsche Bank. Investors should be beware of the "irrational exuberance" that could spell disaster for the market, according to Bank of America Merrill Lynch. And tech stocks once again look unstoppable.
In deal news:
- Roku has tripled since going public — and traders betting against the stock are getting crushed
- CREDIT SUISSE: A takeover won't save Buffalo Wild Wings
- Reddit is reportedly considering an IPO
- Amazon agrees to sell its cloud business in China for $300 million
- Walmart just struck another deal that confirms the death of America's middle class as we know it
- A drugmaker that's taking an unconventional approach to cancer drugs just got a $1.5 billion endorsement