This article discusses common market manipulation techniques in the encryption market, including Whipsaw trading, deception, short attacks, panic creation, sell wall manipulation, and Pump and Dump. (Previous summary: FBI 'junk coin' phishing enforcement: accusing multiple market makers of market manipulation, seizing over $25 million in encryption assets) (Background supplement: PEPE's big dump of 20% in a week> Whale activity analysis: market manipulation or genuine investment?) Both the Web3.0 market and the TradFi market are derived from the same financial logic, so they are equally susceptible to market manipulation. Many manipulation techniques that plague stocks and other financial products, such as wash trading, panic creation, and Pump and Dump, also appear in the Web3.0 market. It is worth noting that due to the decentralization characteristics of the Web3.0 market and the lack of regulatory rules, these manipulation behaviors are more likely to succeed. Manipulators operate behind the scenes, using various means to manipulate prices for their own profits. This article will explore common manipulation techniques in the Web3.0 market and analyze how these behaviors affect the entire industry. It is hoped that investors can better understand and distinguish market manipulation behaviors to protect their assets. Common manipulation techniques in the Web3.0 market wash trading: Wash Trading is one of the most notorious market manipulation techniques. Manipulators create the illusion of high volume by repeatedly buying and selling the same asset, exaggerating the trading situation of digital assets. This misleads investors and makes them believe that the asset has high liquidity or value. In 2019, a report by Bitwise Asset Management.[1][2]It is estimated that about 95% of Bitcoin volume in unregulated exchanges is faked through wash trading, indicating that a large part of the trading activity in digital assets may be driven by market manipulation rather than genuine market demand. Spoofing refers to traders placing one or more buy or sell orders for a specific asset (usually making up a large proportion of the total order book), creating a false impression of demand or supply to manipulate market depth. In other words, spoofing means that manipulators place large buy or sell orders in the market without the intention of executing them, creating a false impression of supply and demand. Through these false signals, manipulators can induce price fluctuations and profit from market reactions. Bear Raiding is usually used to maliciously depress asset prices. Manipulators trigger panic selling in the market by shorting or massively selling a certain asset, causing a chain reaction and leading to sustained falls in price. Bear Raiding usually occurs during periods of increased market uncertainty, with manipulators further amplifying market panic to prompt investors to sell their holdings. Therefore, in the highly sensitive and volatile market environment of Web3.0, such manipulation techniques are particularly effective, as any action may trigger unexpected large falls in price. FUD is the spread of negative or misleading information to create doubt and incite panic among market participants. Common FUD includes spreading rumors, such as government crackdowns on encryption assets, fictitious news of exchange hacking incidents, and exaggerated reports of project failures. For example, JPMorgan Chase CEO Jamie Dimon once referred to Bitcoin as a 'fraud'.[3]Although his company later dabbled in blockchain technology, it still caused market panic. Although this is not necessarily a direct act of market manipulation, such public comments can lead to panic selling and price volatility in the market. Sell Wall Manipulation A wall manipulation is when a manipulator places a large number of sell orders at a specific price level to form a virtual "wall" that prevents the asset price from breaking through that level. These huge orders may intimidate other traders and find it difficult to break through this price limit. However, once the manipulators have bought enough tokens at a lower price, they withdraw their sell order, causing the price to rise rapidly. This method is often used by market makers and high-frequency traders to accumulate asset chips at low prices. Pump and Dump (Pump and Dump) Pump and Dump is one of the oldest methods of market manipulation, which artificially raises the price of an asset (pulling up the price) through coordinated buying, and then sells it when the price rises (dump). This type of action is usually initiated by a group of traders or KOLs on social media who hype low-liquidity tokens in private chat groups or social media to entice retail investors to buy. Once the price rises, the manipulator sells his holdings, leaving the latecomer to take over and absorb the loss. In October 2024, the FBI launched Operation Token Image[4]Established a fake token NexFundAI to catch criminals who are committing fraud. The operation exposed a $25 million Pump and Dump scheme, where traders manipulated the volume and price of the token to attract unaware investors. Once the price rose, the planners dumped their assets, causing a sharp fall in price. In the end, 18 manipulators were charged with market manipulation. The role of market makers In the Web3.0 market, the function of market makers is to provide liquidity and market depth through continuous buy and sell orders, ensuring smooth trading. However, some market makers abuse their position, especially through wash trading and manipulation. With a large amount of asset liquidity at their disposal, these illicit market makers can manipulate prices for their own benefit, thus affecting price trends. Although market makers play an important role in any trading ecosystem, the Decentralization feature of the Web3.0 market, coupled with the lack of information transparency in some areas, provides them with more room to maneuver. As a result, regulatory authorities such as the U.S. Securities and Exchange Commission (SEC) have begun taking action against some Web3.0 companies in an attempt to curb such abuses. However, regulatory enforcement remains challenging under the current circumstances. How to prevent market manipulation Although market manipulation is difficult to discern, the following points can help reduce your risk: Investigate the token background: To avoid becoming a victim of Pump and Dump manipulation, one of the simplest methods is to investigate the token's trading history, for example, through Skynet.You can check the historical information of the token. Tokens with only a few days or weeks of trading history have greater risks because of their lower liquidity and are more likely to be chosen as manipulated objects. Be particularly cautious about sudden price surges of new tokens or tokens with low liquidity. Choose exchanges with high transparency: Some exchanges actively suppress market manipulation by increasing information transparency, reviewing volume, and other measures. These exchanges monitor trades regularly, provide transparency reports, and ensure that volume is not artificially inflated. Choosing well-known exchanges that offer market security measures can help reduce the risk of suffering losses from market manipulation. Stay vigilant and analyze carefully: Pay attention to large orders that are suddenly withdrawn, volume surges without reliable news support, and untrustworthy rumors. Use tools such as blockchain browsers to track trades and verify the authenticity of volume surges. In addition, try to avoid making impulsive investment decisions based solely on social media hotspots or rumors. Building a safer future As the Web3.0 market matures, the situation of market manipulation may undergo significant changes. The evolution of the market depends on strengthened regulation, such as in Europe...