I often have my bag of popcorn out these days as the world of tech eats itself while Rome burns. A great example of watching as a tech giant tries to implode has been the takeover of Twitter by Elon Musk.
But it is not just Musk that is upsetting the world. Musk super-adorer entrepreneur and social media personality Matt Wallace is stirring things up in the Dogecoin community using his influential Twitter account to make wild claims.
Scam hunter 'Salty' (@CalisCihan) gave us some insights into Wallace's scheming. Here is a view of the human side of crypto scams and the era of unregulated crypto Pump and Dump.
The sting of the crypto-scam
Many connect crypto and pyramid schemes because of debacles such as the $4b OneCoin scam carried out by Dr. Ruja Ignatova and her crew. Dogecoin has joined the 'crypto-scam hall of fame' with a $258 billion lawsuit alleging that Musk ran a pyramid scheme to support Dogecoin.
Matt Wallace is accused by many of following in his idol Musk's tracks, using his influence to encourage people to buy, buy, buy! Crypto before dumping his coins at an inflated price.
Wallace is no stranger to accusations of running crypto scams, Salty told Cybernews.
"Matt slipped up a couple of times in his videos where he admits to tricking people into buying crypto while dumping their tokens. Matt is now using his attention from massaging Musk's ego to shine a light on himself, increasing his influence and using this to lure people in his private groups into scamming them." Salty added this caveat, “the difference between Matt and Musk is that Musk usually delivers a product eventually, even if it takes ages, while Matt is not delivering a product.”
Salty shared a video showing Matt Wallace talking about his ‘pump-and-dump’ schemes:
Salty continued to explain, “Matt has become pretty good at manipulating the Twitter algorithm, using his followers and people from his Patreon and Telegram groups to increase his numbers and influence.”
A quick look through Matt Wallace’s Twitter and you can see how he winds up the market, making unsubstantiated claims such as this:
This tweet went out on October 30, 2022. At the time, the Dogecoin market value was $0.06. You can see the sudden surge in price over the next ten days to $0.16, then a steady drop over the following days to settle back at a little over $0.07.
A smoking (crypto) gun
So, what, you may ask? Crypto is known for its fluid price. This is true; the crypto market, especially in recent months with the collapse of mega crypto-exchange FTX, has seen even the healthiest of crypto coins struggle. However, Wallace has been watched closely by the Dogecoin community, and they are not happy with his pump-and-dump shenanigans.
Wallace even started a crypto coin named Accept Crypto. However, the token has tanked, and a tweet from the official Twitter account @AcceptCryptos states that they are “doing a recission for investors.”
To add to this, a video, recorded live in Accept Crypto’s Telegram group right after the token crash, has been shared with Cybernews showing the debacle surrounding the crash.
Matt told his Twitter followers that the launch of Crypto Accept had "not gone as planned whatsoever."
High-profile people are now sending out warnings across the social airwaves that Wallace is not to be trusted. For example, Salty told us, "Billy Markus (creator of Dogecoin) called Wallace out for scamming, and now Wallace is enticing Trump backers to attack Markus's profile."
The war of attrition between Wallace and others continues, and recently Dogecoin commentator @Mishaboar, warned Musk about Wallace:
Wallace claimed he had never dumped on a pump, and released this video in response to Musk and Mishaboar.
Doge’y Pump and dump crypto
Matt Wallace has almost three-quarters of a million followers on Twitter. This gives him a massive reach and strong influence over his followers' decisions. Various reports from the Doge community on Twitter and Reddit allege that Wallace uses this influence to pump up the crypto volume and then dump his tokens at an inflated price. Pump-and-dump scams are the stuff of legends.
One of the most famous pump-and-dump scams happened before the banking crash of 1929. The Radio Corp. of America saw its shares jump from under $100 to more than $500 just before the banks crashed.
If you can whip up enough excitement about a share or a crypto coin, buy volumes increase, and the price follows. If you own much stock at the pre-pump price, you can sell them off at the inflated price, making a hefty profit.
This is what the Doge community is accusing Matt Wallace of doing. By creating a scam environment around Doge, Wallace is devaluing the coin and scamming folks out of their hard-earned money.
Can crypto regulations stop pump-and-dump scams?
One of the issues with cryptocurrencies is the need for more regulations to enforce good behavior. But, things are changing in the regulatory landscape around cryptocurrencies.
Regulations, however, won't stop people trying to pump and dump, but they can make those people pay if caught. Unfortunately, this is too late for those already scammed. The problem is that scams are as much a human problem as they are technical; digital scams are just an extension of their real-world counterparts and rely on manipulating human behavior.
Fortunately, the crypto community is on the case and calling out potential signs of a pump-and-dump scam. Education on the signs of a pump-and-dump in action is one of the best ways to prevent them. Through campaigns of education to dilute misinformation and manipulation, scammers can be held to task.
A final word from Salty "to my knowledge, there are no special Laws to prevent P&D for Crypto. However, investment regulations cover all aspects of "Investment-Fraud", and what Matt is selling are promises that the Tokens or NFTs he is selling and promoting will make people rich, but he is rigging the game for his benefit. The two guys that pulled off the "Frosties NFT rug pull" were using similar methods to Matt, they both face 20 years in prison, so my hopes are high that Matt will also be brought to justice."
If you feel you are a victim of a pump-and-dump, you can report it to your local financial ombudsperson. Your information can be used as evidence to stop some of the more obvious scams.
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