Deposits blocked, pump and dump scheme committed
Cryptocurrency Refereum’s (RFR) price surged more than ten times at the Upbit cryptocurrency exchange, increasing from 0.33 won per coin to 3.65 in a matter of hours on Oct. 8. Investors are only allowed to withdraw cash from the RFR, but were forbidden from depositing money after RFR was given a warning from the exchange. This is a typical example of a “Pump-and-Dump” scheme, an artificial manipulation of prices before selling the cheaply purchased cryptocurrency at a higher price later. What’s concerning is that someone reportedly deposited massive amounts of RFR to the Upbit exchange early last month, when ordinary investors were banned from doing so. #RFR sees an unusual surge in prices on October 8 Refereum received a warning from the Upbit exchange as the makers of RFR stopped its cryptocurrency project temporarily for business reasons. Cryptocurrency projects that receive a warning are lifted off from the exchange after a week of review. Cosmo, another cryptocurrency project, was taken off the exchange in early July after it received a warning. Upbit made an unprecedented move to extend the warning placed on RFR. The warning pulled down the price of RFR currencies, which used to be traded around 0.7 won per currency. For a month, it was traded at around 0.3 won. Trade volume also hit bottom. For the past month, the daily trade volume on RFR currencies failed to go over 200 million won. as almost an insolvable asset by investors, prices of RFR currencies started jumping from 10 a.m. last Thursday, despite no positive news reported in the media that could affect prices. One noteworthy issue is that the cryptocurrency project of the RFR suddenly broke the months of silence and posted an update on their project. #When others were banned from deposits, some succeeded Investors who were skeptical of RFR’s sudden price hike started tracking down the currency’s transaction history. It turns out someone deposited money on September 2, according to transaction history logged on Etherscan, a search engine that lets users look up, confirm, and validate transactions on the Ethereum decentralized smart contracts platform. While deposits were purposefully blocked by the Upbit exchange, investors can send money if they already know the deposit address to RFR currencies. Investors say, while transactions might be possible, it was Upbit’s responsibility to block funds from ending up in the wallets. “It is true that deposits occurred even after the warning was issued,” confirmed the spokesperson for Upbit. “We suspect someone has deposited funds to an RFR wallet which pre-existed before the warning was placed. We took measures on the case and will improve our system to prevent the same cases from happening again." #One man’s loss is another man's gain Considering the exchange said it will “improve internal systems,” it’s reasonable to suspect the Refereum incident is not the first of its kind. The pump-and-dump scheme was only able to come to the surface thanks to investors who were smart enough to check Etherscan for evidence. While the case shed light on the problem of pump and dump schemes, unfortunately, there is no way to retrieve the illicit yields collected by the perpetrators since there’s only circumstantial evidence and no hard proof to prove their wrongdoings. When asked what Upbit plans to do against investors who successfully deposited funds, the exchange only said it’s “concentrating on the system upgrade” adding it will “need time and internal discussions” to answer. Join D plans to update readers on the matter as soon as we receive follow up answers from Upbit.