GameStop FOMO inspires a new wave of crypto pump-and-dumps

Physical representations of virtual dogecoins sit atop computer components.

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After the California Gold Rush, in 1870, two Kentucky swindlers whipped up a scheme to prey on thirsty financiers’ FOMO. They invented a diamond field out West. Investors sunk millions in today’s money into the scheme. All of it, of course, was for naught—a cautionary tale about believing anyone who claims they have a surefire plan to get rich quick.

A hundred and fifty years later, a new generation of amateur investors is equally desperate not to miss the next big thing in the finance world. After watching the great GameStop stock boom play out on sites like Reddit and Discord this winter, hundreds of thousands of hopefuls are joining Discord groups that promise big earnings from manipulating the crypto market—also known as crypto pump-and-dumps. Step 1: Buy in early, when the coin is low. Step 2: convince other people to join you—the more, the merrier, the bigger the potential gains as the price of the coin goes up. Step 3: Sell out before the price tanks. Get the timing right, these groups promise, and you come out a winner (and richer). Losers are left holding the bag.