Pump And Dump Plagues Indian Crypto Platforms
Last Updated on 9 January 2021 by CryptoTips.eu
India is seeing record interest for both crypto platforms and transactions. However, given that young Indian men (85% of users registered on Indian crypto platforms are men and most of them are under the age of 35) do not have to oblige by KYC (Know Your Customer) rules, the new industry branch is seeing multiple pump and dump schemes being developed in smaller coins.
Just as happened in the wider crypto space during the ICO bull run of 2017-2018, anonymous traders place themselves with large positions in a small unknown coin and start driving up the price, attracting new investors keen to diversify their portfolio in crypto.
However, as soon as these worthless cryptocoins reach a target level, they take out their initial investment as a major profit and the price crashes. Ealier we reported that India was plagued by other crypto scams.
AML and KYC policies
Just as Bitcoin crossed the $41,000 mark yesterday. CoinDCX, a large local exchange admitted it had 4 accounts in one day that were seen artificially pushing up the price of such “sh*tcoins”.
On account of recent pump and dump incident detected by the CoinDCX system, we are sharing a detailed report on how it was carried out and what actions we took.
— CoinDCX: India's Largest Cryptocurrency Exchange (@CoinDCX) January 6, 2021
Every user needs to be aware of such practices to prevent themselves from becoming a victim. https://t.co/PA5tHQMcHj
Monark Modi, founder and CEO of Bitex, an exchange that operates in India admitted the problem:
There have been instances where certain transactions were red flagged when they were in conflict with AML policies on the exchange and we had to seek details on source of funds from the customers,
At Bitex in addition to ensuring strict KYC, we also have stringent Anti Money Laundering (AML) policies that ensures that transactions done on the exchange are legitimate and in accordance with regulations.
Users double
Meanwhile interest in crypto investing continues to surge to unseen heights in the Aian subcontinent, which recently was in the cryptonews when it considered taxing future transactions by 18%.
The largest cryptocurrency exchange in India, WazirX, said that it’s user base has doubled in the past six months. Transactions were worth $2.34 billion in 2020 alone. For a country where the average monthly salary is $440 in major cities, that is a huge number for any new branch of the finance industry.
