Pump and dump
A pump and dump is a scheme where promoters drive up an asset's price with hype, then sell their own holdings into the demand they created. The price typically falls once the promotion stops, leaving late buyers with the losses.
The two stages
The SEC's Investor.gov describes pump-and-dump schemes as promoters pushing a price up with false or misleading statements, then selling their own holdings into the rise. After the promotion stops, the price usually falls, and investors take the losses. The pitch often comes with claims of inside information and urges people to buy quickly.
What it looks like in crypto
The SEC says microcap companies are particularly vulnerable because there is often limited publicly available information, and lists channels used to spread claims, including social media, newsletters, online ads and chat rooms. Small tokens share those traits: little verifiable information, shallow liquidity and heavy promotion on social platforms and group chats.
The SEC's crypto scam alerts also warn about fraudsters who use group chats and impersonation. Our explainers on rug pulls, bundled launches and holder concentration describe the onchain footprints that sometimes accompany coordinated selling.
Habits that help
Be wary of urgency, guaranteed-return language and anonymous promoters. Look at who holds the supply, how much liquidity exists and whether early wallets are already selling. Using on-chain scanners can show some of this, but no tool proves a token is legitimate. Do not treat any token or venue as safe because it is popular. Pump-and-dump schemes can be illegal, and nothing here is advice.
Common mistakes
Buying because a post says a token is about to rise is the typical trap, since the person posting may already hold a position and benefit if you buy. Another is mistaking a rising chart for proof of demand, when a handful of wallets can produce the same pattern.
Also be careful with anyone who asks you to move conversations to private groups, pay an upfront fee, or share keys. The SEC's alerts on crypto scams describe these tactics. Report suspected fraud to the relevant authority in your country.
Where this shows up
- Bubblemaps — Traders and researchers who want a quick visual check of whether a token's supply is concentrated in linked wallets before buying.
- RugCheck — Solana memecoin traders who want a free, quick risk check (authorities, LP locks, insiders, holder concentration) before buying a token.
- GMGN — Multichain memecoin traders who want smart-money tracking and copy trading across a web terminal and Telegram bots.
- DEX Screener — Traders who want a free, multi-chain view of new and trending DEX pairs before they trade on a separate DEX, wallet or bot.
- Birdeye — Solana-first traders who want a token tracker with a mobile app, and developers who need a metered on-chain data API.
- Solscan — Anyone verifying a Solana wallet, transaction or token mint on-chain before or after a trade.
Sources
Last checked . Fees and terms change often; the venue's own page wins if it disagrees with ours.
- Pump and Dump Schemes (Investor.gov, SEC) — checked 2026-10-17
- Digital Asset and Crypto Investment Scams (SEC investor alert) — checked 2026-10-17