Earlier this week, on the 10th of October, notoriously known and claimed to be Russian crypto exchange YObit got its share of popularity by making a Twitter announcement about the series of 10 random coin “pumps.” It’s when coordinated purchasing inflates the price of crypto, attracts external buyers, and the initiators quickly flip the asset for a profit. While the ones started the pump are definitely profiting, the crowd is got hurt.
Something that seemed like a hacked Twitter account turned out to be a reality as soon as YObit users received email notifications from the exchange with the next pump countdown. The first asset in the game was Putincoin gaining 1398% increase in under 20 minutes as reported by Twitter user @istvan33001710 and the pump produced trading volume near 130 BTC in just 40 minutes.
Another user @chepicap shared the video of how it was happening:
As well noted by @McAffeeExecutive, surprisingly enough it was more important for media to report the fact of the future pumps rather than inform people of some issues with YObit.
And it’s still a lot to investigate: it might be or might not be Russian. So far the only signs pointing at that is the domain registration through the Russian registrar reg.ru (which might be used from any country), news on intention to block (source is in Russian) it by Roskomnadzor (Russian Federal Service for Supervision of Communications, Information Technology and Mass Media). But the watchdog also blocked PornHub and LinkedIn, and it doesn’t make any of those two Russian. There were also publications claiming that one of the exchange’s owner is Pavel Krymov, also known as the mastermind of a Ponzi scheme Questra World, however, there were a very few direct proofs of his ownership of YObit.
We encourage anyone experiencing troubles with their YObit account to join the Facebook group gathering information from the exchange’s victims.
Future Times managed to find a former participant in YObit orchestrated pumps and learn how exactly the process was working:
I have participated in Pump and Dump schemes. YObit was the first place to go for it. You would purchase hundreds of thousands of tokens that were priced at one satoshi and keep silent. Then at some point, everyone was in, the pumper would post on Twitter, Facebook, everywhere, rumors of the “real” news. It didn’t have to be big news really; anything would do. They would even make fake Wikipedia pages as well as Google, Reddit, and Steem articles.
They would have at least 200 to 300 members buying and selling to each other to create the illusion of volume. Usually anything in between 5 and 15 BTC. When the coin would reach five satoshis or higher if there were enough fools around they would dump. Biggest whale first. Then they would buy back the coins to give the impression that that was just a correction and keep going higher until 5X to 10X. By that point, some “believers” would start hearing and spreading rumors that it would reach times X. That’s when the entire group would pull out. By that point, it didn’t matter if some of the members of the group got burned because the organizer in a lot of times would fund the entire event. He would give 0.05 to 0.1 BTC to members to orchestrate the pump. They were allowed to keep it as long as you were referred into the group. It was so much money that you were hooked.
Whoever was left in the game or not a part of this “by referrals only” group were just holding bags of useless coins not knowing what to do.
Future Times tried to connect with exchange representatives using the support box inquiring the possibility to join the pump have but never received the answer yet.
As commented by the analyst, investor, and blockchain writer Joseph Young he’d rather had his funds lost in a $500 million hack than saw this.
The next YObit pump supposed to be happening on Monday, the 15th of October, 2018. Stay safe.