The AFM (Authority for the Financial Markets) of the Netherlands has announced the start of a new initiative to combat cryptocurrency price manipulation schemes, known as “pump and dump.” The agency will closely monitor cryptocurrency market dynamics and social media activity to detect illegal schemes that artificially inflate prices, followed by a sharp price drop. Price manipulations pose significant risks to investors, especially those without experience in crypto trading.

Goals of the Anti-Manipulation Effort

“Pump and dump” schemes involve intentionally driving up the price of an asset, followed by a crash, leading to significant losses for investors involved in the manipulation. The AFM intends to increase oversight of such operations and hold accountable those who exploit market mechanisms for personal gain. The agency will use social media data and track suspicious trading activity to quickly respond to manipulations.

Impact of Cryptocurrencies on the Dutch Economy

Interest in cryptocurrencies among the population of the Netherlands is rapidly growing. According to surveys, citizens of the country have invested around $33.6 billion in digital assets, reflecting a high level of engagement in the cryptocurrency market. The introduction of strict measures to combat market manipulation aims to protect investor rights and improve transparency in the crypto market.

Global Efforts to Regulate the Crypto Market

The AFM joins a number of international regulators who are working to protect cryptocurrency market participants from manipulation and fraudulent schemes. These measures will help strengthen trust in cryptocurrencies and improve market infrastructure.