Developers and exchanges acting in bad faith in the cryptocurrency market often resort to dishonest practices to make profits at the expense of other investors’ losses. These practices, in addition to being harmful, exploit the lack of regulation and the dynamism of the cryptocurrency market. Some of the most commonly used methods include:

Pump and dump is a strategy in which those involved artificially inflate the price of a cryptocurrency, creating the illusion of high demand. When the price peaks, they sell their positions, causing a sharp drop in the value of the coin, resulting in significant losses for unsuspecting investors.

Additionally, some rogue exchanges use hidden fees and transaction manipulation, charging unexpected amounts or altering order execution to maximize their profits. This can include overcharging on withdrawals or deliberately creating delays in transactions to take advantage of market fluctuations.

Another common practice is ICO (Initial Coin Offering) fraud, where developers launch fake projects or exaggerate their benefits to attract investment. After raising a significant amount of funds, they abandon the project, leaving investors with irreparable losses.

There is also Wash Trading, which consists of carrying out fictitious transactions to simulate high liquidity or demand. This strategy manipulates investors into believing that the asset is appreciating, when in reality, it is all a fraud.

Exchanges and developers can also resort to manipulating buy and sell orders, setting up automatic orders that artificially distort the market. This practice influences traders’ perceptions, creating favorable scenarios only for those responsible for the manipulation.

Finally, some frauds involve exploiting vulnerabilities in smart contracts or blockchain networks, allowing theft of funds or manipulation of financial information.

Given this scenario, it is crucial that investors pay attention to the reputation of the exchanges and the projects they decide to invest in. In addition, seeking means of external control, such as the implementation of appropriate regulations and legal measures, is an indispensable step to combat abusive practices and protect theintegrity of the cryptocurrency market. These initiatives promote greater transparency, trust and accountability among all participants in the ecosystem.$STPT $ATA $USUAL