Sam Bankman-Fried allegedly used Alameda Research to buy newly listed coins and pump their price.
As a way to keep FTX and the companies under its umbrella profitable, Bankman-Fried allegedly approached developers behind projects, insisting that they make their trading debuts on the exchange's platform. Following that, the report claimed that Alameda Research would buy some of these freshly listed coins to raise their value.
The newspaper compared Bankman-Fried strategy with a large scale pump-and-dump scheme. A stock market operation refers to an increase in stock value by insiders in order to entice retail investors. The insiders then sell their shares, and other investors are left with worthless stock.Pump-and-dump schemes are illegal, and are especially problematic when scammers use false or misleading statements to attract investors to micro and small-cap stocks.
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