Telegram group gives us a coin and then pumps the coin to take profit, before it dumps back down.
Question from user.
The SEC describes a pump and dump scheme as something with “two parts. In the first, promoters try to boost the price of a stock with false or misleading statements about the company. Once the stock price has been pumped up, fraudsters move on to the second part, where they seek to profit by selling their own holdings of the stock, dumping shares into the market..”
When this occurs in regulated markets like stocks/shares, its classed as securities fraud and carries severe fines, and in many cases prison time.
Knowing this would you participate in a “pump and dump” when trading stocks and shares? If this act of pumping and dumping is already defined as a fraudulent act, I am not sure how it would be permissible under Islam. There are many hadiths that state misrepresentation and/or false information as part of a transaction, will make the transaction haram.
Now apply the same to the crypto markets and you should come to the conclusion that pump and dump schemes are clearly unethical and probably best avoided.
Hope this helps IA
