Initial coin offerings (ICOs) have recently emerged as a popular method of financing blockchain-related startups. In an ICO, a startup creates and distributes its digital tokens, typically in exchange for Bitcoin, Ethereum, or fiat currencies such as U.S. dollars to raise capital to fund its operations. The startling growth of this market, coupled with rampant speculation and volatility, has both generated excitement and raised concern about potential exploitation or fraud.
In a new paper, we study “pump-and-dump” schemes (P&Ds) in the cryptocurrency market. P&D is a form of price manipulation that involves artificially inflating an asset price before selling … Read more