Artificially inflated prices and lightning profits: cryptocurrencies targeted by

Souvenir medals from the cryptocurrencies Tether (USDT), Bitcoin and Etherium, on May 8, 2022 in London (AFP/Archives/Justin TALLIS)

A cryptocurrency whose price jumps states before falling: speculators, organized in groups, no longer hesitate to launch lightning operations to artificially inflate the value of these highly volatile digital assets and quickly reap profits.

In mid-May, an obscure cryptocurrency, the Enzyme, went from 30 to 74 dollars in a few minutes, with a very high volume of transactions. A few hours later, it plunged again and it is worth only 27 dollars today.

At the origin of this movement: a Telegram messaging group on which several investors chose their target before taking action.

“On the stock markets, it is illegal, but criminals take advantage of the less severe regulatory framework for cryptocurrencies,” explains Mircea Mihaescu, of the specialized company Coinfirm.

To give more scale to their action on the Enzyme, they also used a general public social network, Twitter in this case, in order to encourage other people to invest as well.

“Whales (nickname for big investors, editor’s note) collect lots of +MLN+ (the abbreviated name of Enzyme on the markets, editor’s note), it’s worth a try”, for example tweeted a certain Cryptosanta.

Enzyme Finance, the company that manages the cryptocurrency, tried to calm things down, warning people to beware of “fake accounts” that sought to supposedly inflate its value.

But it was too late and many investors had already embarked on a perilous process: buy and then sell quickly enough before the soufflé fell and demand dried up.

Almost all of them have lost the car, in these schemes it is essential to act very quickly. For the Enzyme, the bullish push indeed lasted only a few minutes and the only ones who had a chance of not losing money were the initiators of the movement.

– “No real demand” –

“In all these manipulations, everyone is convinced of being” the one who will benefit from the rise in the price, explains behavioral economist Stuart Mills, of the London School of Economics.

Telegram messenger icon on a smartphone screen in Moscow in March 2022

The Telegram messaging icon on a smartphone screen in Moscow in March 2022 (AFP/Archives/-)

The phenomenon is not isolated. Other groups are promoting a similar operation in the coming days.

According to data scientist Matt Ranger, most of these actions are driven by people who are primarily marketing savvy.

“You don’t need to know how to write a line of code,” he points out. It is enough to know that investors collect messages that resonate with cryptoassets, for example by taking up the theme of the failure of major economic institutions.

Conspiracy theories abound and some suspect large American investment funds of having orchestrated the current sinking of cryptocurrencies, to then buy them at a good price.

“Suddenly all this unethical behavior becomes more justified” with these theories, notes Stuart Mills. Because the speculators say to themselves: + I got fooled, so it’s my turn to fool the others +”.

The recent decline in demand for cryptocurrencies and the resulting decline in prices, however, makes these operations all the more dangerous.

“The only buy orders come from these people on Telegram or Twitter,” warns Matt Ranger. So, at some point, with no real demand from lamba investors for the targeted cryptocurrency, “everything collapses”, he underlines.

© 2022 AFP

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