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Security term

Pump and dump

Coordinated buying to inflate a price, followed by insiders selling into the excitement.

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By the Orca Crypto teamUpdated 2026-09-01How we check this3 min readDefinition
Definition

Coordinated buying to inflate a price, followed by insiders selling into the excitement.

Organizers accumulate a low liquidity token quietly, then promote it hard across social media and paid groups. Retail buyers arrive, price spikes, and the organizers sell into that demand.

The structure guarantees that most participants lose. The profit comes from the people who bought late, which means the scheme needs a steady supply of them.

In practice

Any group promising a coordinated buy at a specific time is running this. The people who told you about it are already positioned.

What people get wrong

That you can join early and get out in time. The people who organize it are already positioned and are selling into the excitement they created, so the buying you can see is the exit they need. Being early to a pump you heard about means you are not early.

Common questions

Are pump and dump groups illegal?
In regulated markets, yes, and prosecutions happen. In crypto they operate openly on Telegram and Discord because enforcement is patchy. That does not make joining one safe or legal.
Can I profit by getting in early on a pump?
The people organizing it bought before you were told, and they are selling into your buy. Being early enough to win means being one of the organizers.

Where to go next

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