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The History Of Market Manipulation (Avoid MAJOR Crypto Scams and Fraud) - YouTube
Channel: BitBoy Crypto
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where there's a large amount of money
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there's bound to be grift it's just
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human nature from Bernie Madoff to
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Centennial Technologies all the way back
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to Yazoo land fraud folks have been
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getting scammed out of their hard-earned
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money for a while now and crypto of
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course is no different in this video
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we're going to take a look at the
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history of scams and schemes and how
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they are still at play in crypto today
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let's get it
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welcome to Big Boy crypto my name is Ben
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and my mission is to empower you to find
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Financial Freedom through crypto assets
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that sounds good hit the Subscribe
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button it's fun to look back at some of
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the most audacious and Brazen scams in
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history how on Earth did they think they
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would get away with it in the words of
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the late Norm Macdonald you only hear
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about the drug deals that go bad there
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are plenty of other scams that we may
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never know about and others that are
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staring Us in the face and laughing I'm
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looking at you Amway
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learning about scams will help you see
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the warning signs and not get sucked
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into the hype about a magical way to get
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rich quick
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you can sometimes get rich quickly but
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mostly that's by chance like playing the
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lottery
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well the lottery just came too but I
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digress so let's get started price
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fixing one of the oldest games in the
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book price fixing Works in any type of
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Commerce not just stock markets from the
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beginning of time alliances would be
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formed between business owners to set
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the price of their goods or services
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above or below the fair market value in
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order to increase their profits or in
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the case of low prices squeeze out a
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competitor
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the Libor scandal from 2011 was the
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biggest and most recent example of how
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centralized Banks got away with scamming
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other Banks and governments for years
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Libor is an acronym for London interbank
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offered rate and is the average interest
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rate aggregated across several major
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worldwide Banks
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Scandal came about when Executives at
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Barclays and the Royal Bank of Scotland
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started fixing a manipulating interest
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rates that were higher or lower than
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their actual reported rates this touched
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everything from mortgages student loans
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derivatives and more worldwide
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billions of dollars were skimmed off to
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dozens of bankers and insiders who
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manipulated the Libor numbers it got so
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Brazen that traders in New York will
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call Barclays and just ask for rates to
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be set like this transcript from the
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investigation from a call with a Trader
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if you keep 6s month unchanged today I
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will do one humongous deal with you like
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a 50 000 Buck deal whatever I need you
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to keep it as low as possible if you do
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that I'll pay you you know fifty
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thousand dollars one hundred thousand
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dollars whatever you want I'm a man of
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my word crazy and somehow crypto is the
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predatory system give me a break in the
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world of Market manipulation common term
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you'll hear now and again is a good
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old-fashioned pump and dump this is when
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the price of something goes up and up
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and up to the point where people believe
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it will go up forever
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before you know it rug gets pulled out
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from under you and the price bottoms out
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faster than your butt hits the ground an
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early example of a pump and dump known
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as the south sea bubble can be found in
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the history books all the way back in
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the early 1700s at the time the Brits
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were in a war with Spain and France and
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they were broke says they couldn't get
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any loans from the banks they turned to
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a man named John blunt a rich man who is
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famously notorious for insider trading
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at last the south sea company was
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created to take over Britain's national
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debt in exchange for a six percent
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interest
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Those Who the British government owed
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were given stocks of the company instead
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of their money back debt solved right
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the government then gave the south sea
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company several monopolies including one
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on the slave trade
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but the problem was
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the South Seas refers to South America
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which was colonized by Spain and
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considering they were at war with Spain
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that Monopoly didn't exactly land them a
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hotel at Park Place
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there was a peace treaty in place but it
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didn't bode well for the South Seas
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company because there were unfavorable
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taxes stacked against them and it turns
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out trading with your enemies isn't as
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fun as landing on free parking
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eventually the king of England King
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George the first became the governor of
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the company which created confidence in
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a positive Market sentiment
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consequently the prices started to rise
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and this is where they got very greedy
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long story short John blunt took on more
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debt so they could pump out more shares
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the company even gave people who
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couldn't afford the stock loans which
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were backed by the stock
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to buy the stock with slippery slope
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John blunt even negotiated with several
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high-ring politicians behind closed
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doors these behind the scenes
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negotiations caused the price of the
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stock to continue to grow exponentially
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and all this was the air inside of the
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first bubble in the stock market
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from January to August 1720 the price of
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the stock went from around 100 pounds to
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more than a thousand by September the
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bubble done burst and it fell over 80
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percent in one month by December the
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price crashed back down to 124 pounds to
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top it all off
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government and tens of thousands of
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Traders crashed with it even Sir Isaac
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Newton got wrecked I thought he was the
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guy that knew if something goes up it
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has to come back down like didn't he
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invent that guess not
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as The Story Goes he bought into the
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stock and actually sold it weeks later
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for a seven thousand pound profit but
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then the price kept going up and up
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fortunately the king of calculus himself
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got a good old-fashioned case of fomo
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bought back in at the top and suffered a
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20
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000 pound loss that's more than I need
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to lose his loss is equivalent to more
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than three million dollars today it just
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goes to show being greedy never works
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out even the smartest man to ever live
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can get wrecked pumping up schemes will
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always exist in some form or another as
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long as people are still greedy some
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things will never change just look at
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ethereum Max emacs was coin promoted by
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Kim Kardashian Floyd Mayweather and
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Logan Paul and was used to buy tickets
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for his fight against Floyd Mayweather
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last June he's definitely quick on his
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feet in the ring but he's not undefeated
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in a courtroom some people may say a
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classroom
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everyone involved in ethereum Max now
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getting sued time will tell if he's
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victorious in this latest bout the
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lawsuit was filed by a group of
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investors who are seeking monetary
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relief for the damages done by the pump
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and dump they're attempting to sue the
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creators of ethereum Max as well as the
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aforementioned celebrities yes these
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celebrities didn't create the scheme and
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it remains to be seen if they knew what
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they were promoting
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but without their Outreach pump and dump
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of this proportion wouldn't be possible
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so they do carry some responsibility
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bear rating or the poop and scoop it's
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kind of the inverse of a pump and dump
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a manipulator wants in on an asset but
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the price is higher than he wants to pay
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so he and a few others will essentially
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start putting out a bunch of fud for the
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asset in the form of spreading negative
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rumors to co-workers industry peers over
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a lunch break calls and emails to news
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outlets or even a few social media posts
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about the topic alternatively if they
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have enough Capital they can put in a
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large amount of short positions that
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other Traders will read and react to so
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has its roots the Dutch East India
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Company when Isaac Lemaire organized a
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bear raid of the Dutch East India
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Company to buy more shares it worked
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after a legal battle a mayor settled out
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of court still made a bundle off of The
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Raid this type of behavior has permeated
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the traditional Financial system
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since its Inception and wild is
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considered illegal by the SEC it's a
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common practice done by nearly all major
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players
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Jim Cramer even went into detail about
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bear raids back in the early 2000s and
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the video is still on YouTube as of this
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recording we'll throw a link to it down
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below in the description
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painting the tape
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back in the day orders would be
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transmitted via telegraphs imprinted on
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a ticker tape machine that would
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literally make a huge racket when it
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would go off
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today's tape is a lot less stressful but
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still packed with the same information
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the tail of the tape shows the volume of
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orders coming through for a particular
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asset
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Traders watch volume to stay on top of
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assets that might be getting ready to
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jump in price
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so for the manipulator the idea is to
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show a lot of volume for a stock inside
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a run on that stock essentially pull a
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pump and dump only using volume
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but pulling this off can only be done if
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you have enough money to show an
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increase in volume and are a willing
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participant the key is to collude with
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one or more traders to trade back and
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forth to each other in various amounts
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as fast as possible
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that spikes the volume but you are only
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trading the same money back and forth
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this can lead to flash pumps that can
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only be seen on short time frame charts
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like 30 minutes or less it's not too
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difficult to pull off and has been done
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with success over the ages most notably
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the Guinness share trading fraud of the
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1980s essentially the Guinness four
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manipulated the London Stock Market so
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they could boost Guinness shares so they
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could take over a much larger Scottish
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Beverage Company this company was named
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distillers paid over 38 million dollars
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to 11 different companies to buy 300
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million and get a stock to inflate the
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price they figure that if the price of
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their stock got high enough
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they could afford the four billion
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dollar bid and thereby acquire a company
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who was previously their competitor it
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all came to light when an American
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Trader named Ivan voeski got into
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trouble and plea bargained his way out
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of it apparently he's never seen
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Goodfellas never ran on your friends
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and always keep your mouth shut even
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since Ivan snitched this has gone down
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in history it's one of the biggest stock
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market scandals you may more commonly
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hear this referred to today as wash
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training
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all in all the point is this when
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there's money on the table someone will
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always try to steal it this is why you
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need to protect yourself by protecting
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your funds and use common sense when you
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get a random DM or telegram message
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about the next Blue Chip crypto and all
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they need is 0.5 of an e for you to 10x
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your money tomorrow get out of there
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don't even click the links use a cold
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storage Hardware wallet don't trade
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without a VPN and do your own homework
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even if someone is famous as Kim K post
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about it ask around first steady Bravo
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would say look into it
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never buy into anything based solely off
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of someone else's research or opinion
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it's important to approach this as
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intelligently as you can because even
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someone as smart as Sir Isaac Newton can
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catch a bad case of the fomo that's all
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I got be blessed way out
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