Crypto Insider Scheme Tricks Retail Investors Amid Bull Market Boom

A new trend in the crypto market involves schemes with 'treasury companies' that enable insiders to turn illiquid tokens into quick profits at the expense of retail investors. This process involves acquiring nearly dormant public companies, injecting funds via 'funds', and rebranding them as 'crypto holdings'. The companies then purchase tokens, often from insiders at negotiated prices, and report a new strategic direction. The share prices soar, attracting retail investors at the peaks who are unaware of the underlying mechanics. Once the lock-up period ends, insiders divest their holdings, leaving the company with overvalued assets while retail investors incur losses. This scheme relies heavily on market growth; as long as the crypto market is rising, it continues to operate smoothly. However, once the market halts its upward trend, latecomers will bear the brunt of the fallout. This pattern illustrates the risks of speculative bubbles and the importance of due diligence when investing in volatile crypto assets. Retail investors should be cautious of sensationalized schemes that promise rapid profits, especially when data suggests insider manipulations and overinflated asset values.