Pump and dump market manipulation is not new to the cryptocurrency market. In the latest story surrounding this issue, a cryptocurrency called WebDollar (WEBD), pumped from a low of $0.0003834 to $0.7128, representing an approximately 185,000% gain as of yesterday. Investors who bought in at the high are now gutted as the cryptocurrency is currently trading $0.0007385 representing a decline of 99.90% from its all-time high. This pump and dump happened all in the space of 3 hours.
Backstory
The pump took the market capitalization of the cryptocurrency from $1.84 million to $1.5 billion. This pump pushed the cryptocurrency to rank #17 on coinmarketcap by market capitalization. The market capitalization is currently $9.8 million as of the time of writing this report. The cryptocurrency is now ranked #903.
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What you should know about WebDollar
WebDollar describes itself as a cryptocurrency that is fully native to the World Wide Web, written in JavaScript, and built around the concepts of simplicity, lightness, and portability. The cryptocurrency’s mission is to foster the mainstream adoption of cryptocurrency by creating the simplest user experience.
WebDollar uses a Non-Interactive Proofs of Proof of Work (NiPoPoW) consensus mechanism, without requiring to download the entire blockchain history. Only the hardest proofs and blocks distinguish attackers from miners, which helps to validate the correct blockchain. The goal is to allow users to access the blockchain for mining from any device. WebDollar reportedly offers a hybrid browser mining, where blocks are mined with a hybrid algorithm using 90% PoS and 10% PoW which is ASIC-resistant and features a GPU-unfriendly hash function, Argon2d.
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What this means
WebDollar’s price action yesterday showed characteristics of a pump-and-dump. This pushed the project’s market capitalization upward and downward by multi-billion dollars even as its trading volume remained within the $400,000 range. Looking into the exchanges trading the coin, 99.23% of its trading activity originated from a single exchange called IndoEx.
IndoEx LTD is registered in the United Kingdom under company number 12029621 that is operating without approval from the UK Financial Conduct Authority (FCA). The U.K Registrar office showed that it notified the company in November 2020 about not sharing details about its shareholders. The company responded to the authority with only one name, Collins Spencer, CEO who holds 1200 shares, hinting that IndoEx is an individually-owned company. Collin Spencer, the only stakeholder in the company, does not exist anywhere on social media.
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Bottomline
Investors have to be careful not to invest in suspicious entities and cryptocurrencies all in the name of FOMO (Fear Of Missing Out). Proper checks into the whitepaper, company structure and team must be done before choosing to invest in any cryptocurrency.
