Dutch regulator warns of risk of 'pump and dump' tactics ahead of MiCA implementation

The Dutch Authority for the Financial Markets (AFM) has warned about the risk of pump-and-dump scams in the cryptocurrency market ahead of upcoming regulatory enforcement.
In an official press release, the AFM announced that it plans to oversee and enforce the "Crypto Asset Market Regulation (MiCA)" which will come into effect on December 30th, and that it will take measures to prevent market manipulation such as pump-and-dump.
The AFM warned that such actions would be expressly prohibited in the European Union. The AFM said, "The Crypto Asset Markets Regulation is designed to enhance the maturity of the crypto asset sector and strengthen investor protection.
"However, regulation will not be able to eliminate all risks in the cryptocurrency sector," he said. In the course of preparing for the implementation of MiCA, the AFM has been battling pump-and-dump schemes in recent months.
The case will be investigated and a precedent will be set for stricter enforcement after MiCA comes into force. Pump and dump refers to the practice of spreading false information in order to artificially inflate the prices of assets such as cryptocurrencies.
The most common method of fraud is to spread false and exaggerated information, which is often spread through social media. Scammers first buy large amounts of cryptocurrency at low prices and then use advertising slogans to
After the price is artificially inflated, they sell off (dump) the asset in large quantities, making huge profits while the public loses.
"Pump and dump scams undermine confidence in the cryptocurrency market," said Hanzo van Beusekom, a member of the AFM executive committee.
"This undermines the trust that is essential for the long-term potential of digital assets."