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Australian Financial Market Regulator warns Telegram Group for Pump and Dump Campaigns

Australia ASIC Australian
Australia ASIC Australian

The Australian Securities and Investments Commission (ASIC) has stated that it is watching Telegram groups for pump and dump actions. The ASIC issued a warning through a Telegram account under the name ‘ASIC.’

The warning was posted on the ‘ASX Pump Organization’ Telegram group, with around 300 members. “We’re monitoring this platform, and we may be investigation you,” the message read.

Investigating Share Pumping

The ASIC also added that the “coordinated pumping of shares for profits could be illegal. We can see all trades and have access to trader identities. You run the risk of a criminal record, including fines of more than $1 million and prison time.”

The ASIC later posted a similar message in the Australian newspaper, stating that the warning posted to the Telegram group was valid. This was after some members claimed that the ASIC’s Telegram page was fake.

While some group members have dismissed the ASIC’s warning, others have criticized the regulatory body for such a move. One group member stated that the ASIC should pay more focus to corporates involved in insider trading. The member further noted that the group was only “sharing stock recommendations.”

Issued Similar Warnings in the Past

Last month, the regulatory body issued a similar warning to social media groups engaging in pump and dump campaigns. It stated that while some participants of these social media pages believe that what they are doing is legal, it could warrant a prison sentence of up to 15 years and a fine of over $1 million.

Speaking on these warnings, Cathie Armour, an ASIC Commissioner, stated that the regulatory body was working with market operators to eliminate the pump and dump campaigns. Armour stated that the commission would continue preserving the integrity of financial markets.

However, the ASIC has not targeted pump and dump campaigns on crypto assets. Nevertheless, the commission has stated that the warnings apply to all financial products, including crypto assets offering financial products. According to the regulators, pump and dump campaigns can lead to investor losses and cause unnecessary price volatility.

Social media platforms have become a major hub for pump and dump campaigns. In January, r/wallstreetbets, a Reddit group, came into the limelight for pumping prices. The Reddit group worked together to pump the prices of GameStop (GME) and AMC Entertainment (AMC) stocks that hedge funds were shorting against. However, unlike other pump and dump campaigns, this Reddit group is more about pumping prices.

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