#pump-and-dump

#pump-and-dump

In April, crypto investors brought a federal class action lawsuit against Benjamin Chow, cofounder of crypto exchange Meteora, and Hayden Davis, cofounder of crypto venture capital firm Kelsier Labs, among other defendants, accusing them of a multimillion-dollar fraud involving a single memecoin, $M3M3. Later, the plaintiffs filed an amended complaint, expanding the allegations to include racketeering activity. They claimed the pair had colluded to rig the market for $LIBRA, a coin promoted by Javier Milei, president of Argentina, which collapsed in value shortly after launch.

Unlike Bitcoin, many altcoins have low liquidity and limited oversight, making them prone to price manipulation and insider exploitation. Sudden spikes in trading volume, large whale transfers to exchanges, token unlocks or social media hype often precede sharp declines. Platforms such as Nansen, DEXTools and LunarCrush help detect abnormal wallet activity, fake liquidity and sentiment manipulation. Researching fundamentals, diversifying portfolios, setting stop-losses and avoiding hype-driven channels are key to protecting your funds.