Bitcoin Daily: Bitcoin Plunge Sinks Crypto Startups; New Tech Predicts Crypto ‘Pump-And-Dump’ Scams


In February, the U.S. Commodity Futures Trading Commission issued a warning to consumers about pump-and-dump cryptocurrency scams, and now regulators have some help in finding the criminals behind them.

According to MIT Technical Review, Jiahua Xu and Benjamin Livshits at Imperial College London have published the first detailed account of how these schemes work, revealing that on average there are two pump-and-dump scams every day, generating about $7 million worth of trading volume a month. So it’s reassuring that the researchers have also developed an algorithm that can predict when they are about to occur by looking for unexpected trades in obscure coins.

In other news, the decline of the crypto market is taking its toll on some startups. ETCDEV, the startup that led development on Ethereum Classic, announced that it’s closing down due to a funding crunch. And ConsenSys, one of the largest crypto-related software startups based in New York, revealed that it is reducing its workforce by 13 percent.

For companies that kept a portion of their funds in digital assets, the collapse of prices by more than 90 percent this year depleted their so-called digital wallets and made raising additional funds more difficult.

“We are definitely a part of this trend,” Igor Artamonov, founder of ETCDEV, said in an interview, according to Bloomberg. “There are a few things that happened at the same time. I am sure if that happened a year ago, that wouldn’t be a problem at all, a year ago there was a lot of free money in the market. But in a bear market there’s a change.”

In fact, cryptocurrencies traded lower on Thursday (December 6), with bitcoin falling 2.4 percent

Market Watch reported that a single bitcoin was getting $3,632.70. A fall below $3,500 could bring a 14-month low at $3,460. But one analyst thinks better times are ahead.

“There’s a growing list of investment tailwinds to consider for 2019. These include significant trade tensions, rising interest rates, political uncertainties, including Brexit, and complacent financial markets,” said Ian McLeod of Thomas Crown Art, a blockchain-based company. “Against this backdrop, we can expect cryptocurrencies will increasingly be seen as investors’ ‘safe havens’ in 2019 and beyond.”


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