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Machine Learning Identifies Cryptocurrency Scams Before They Happen

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Imperial College London researchers have developed an algorithm that can predict "pump-and-dump" cryptocurrency scams


Researchers at Imperial College London in the U.K. have developed an algorithm that can predict "pump-and-dump" cryptocurrency scams prior to their occurrence.

Imperial College London's Jiahua Xu and Benjamin Livshits analyzed several hundred real-world pump-and-dump events, noting many were preceded by unusual buying activity in the target cryptocurrency, consistent with insiders accruing the currency before the pump.

From this they determined that looking for unexpected trades in obscure coins could be used to flag target currencies before their reveal.

Xu and Livshits then used historical data from established schemes to train a machine learning algorithm to identify telltale signs of anticipated scams.

Applying their method to live data demonstrated its predictive viability, suggesting a strategy to undermine or even prevent cryptocurrency scams.

From Technology Review
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Abstracts Copyright © 2018 Information Inc., Bethesda, Maryland, USA


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