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Crypto Law/Level VI · Market conduct/6.1 Manipulation/Lesson 7

Signal groups and coordinated buying

Pump groups, influencer ‘calls’ and coordinated buys: when buying together is just enthusiasm, when it becomes scalping or fraud under US law, and how the EU’s MiCA treats undisclosed positions.

Education, not legal, tax or investment advice. Crypto law differs between countries and states and changes often. Check the current rules where you live with a qualified lawyer or tax adviser before you act.

The lean path

The cheapest, lowest-tax, simplest and most private route the law allows, best first. Each step names the rule it rests on and the condition that keeps it lawful.

  1. Zero-cost rule: when you talk up a token, state your position and any payment in the same post. 15 U.S.C. §77q(b) requires disclosure of issuer pay for touting securities, and 16 C.F.R. §255.5 requires clear disclosure of material connections in endorsements.
  2. Do not sell into buying you prompted without having said you would; that is the ‘scalping’ alleged against McAfee’s team. Catch: a promise to disclose holdings must be kept, and the Fifth Circuit revived a similar stock case on 2 October 2025.
  3. Buying because others are enthusiastic is lawful, and joining a group costs nothing legally if you hold no hidden role. Builders must not seed groups, pay callers or time team sales to a coordinated push, which can make the team part of the scheme.
  4. For EU audiences, MiCA Article 91(3)(c) treats opinions voiced after taking a position, without disclosing the conflict, as manipulation. One visible line disclosing your position and pay satisfies both EU and US approaches, provided it appears wherever the opinion does.

MaterialsThe US Attorney’s Office (S.D.N.Y.) release of 5 March 2021 on the indictment of John McAfee and Jimmy WatsonUnited States v. Constantinescu, No. 24-20143 (5th Cir., 2 October 2025)Article 91(2)(c) and 91(3)(c) of Regulation (EU) 2023/1114 (MiCA)A screenshot of a ‘call’ from a trading group, and a block explorer to check wallets linked to the caller

Wonder

  1. Is it illegal for a group of people to agree to buy the same coin at the same time?
  2. What makes an influencer’s tip a crime rather than an opinion?
  3. Who usually ends up paying for a pump announced in a group chat?

Explore

  1. A signal group is a chat channel, often on Telegram or Discord, where an organiser announces a token and a moment to buy. Members rush in, the price jumps, and those who bought first, usually the organisers, sell into the rush. Buying the same asset because others are enthusiastic is not, in itself, unlawful. The legal trouble begins with deception: hidden positions, false claims, or buying with the purpose of inducing others to buy so that one can sell. For securities, 15 U.S.C. §78i(a)(2) covers a series of transactions by a person ‘alone or with 1 or more other persons’ made for that purpose (lesson 6.1.1).
  2. The leading crypto ‘call’ case is the indictment of John McAfee and Jimmy Watson, unsealed in Manhattan on 5 March 2021. Prosecutors alleged that from December 2017 to October 2018 the team bought cheap altcoins knowing McAfee would endorse them on Twitter, then sold into the price rise after his tweets, without disclosing their holdings, even though McAfee had said he would disclose them. Prosecutors called this ‘scalping’. The team also allegedly took undisclosed pay to promote token sales. The schemes allegedly brought in over $13 million. McAfee died in a Spanish prison in June 2021 before he could be tried.
  3. Stock markets supply the clearest recent ruling. In December 2022 the SEC sued eight social media influencers who allegedly used Twitter and Discord stock-trading rooms to post price targets and say they were buying or holding, while selling into their followers’ purchases, for about $100 million. A parallel criminal case in Texas alleged $114 million in profits. The district court dismissed the indictment, finding no scheme to deprive victims of a traditional property interest. On 2 October 2025 the Fifth Circuit reversed, citing the Supreme Court’s 2025 decision in Kousisis, and sent the case back. It continues.
  4. The same pattern appears in crypto charging papers. In the Saitama case (lesson 6.1.1), insiders allegedly coordinated small buys on Telegram to ‘create an illusion of massive buys and new holders’. In the EU, MiCA states the rule directly. Article 91(3)(c) treats as market manipulation voicing an opinion about a crypto-asset in the media, having first taken a position in it, and profiting from the effect, without properly disclosing the conflict of interest. Article 91(2)(c) covers spreading information or rumours that give false or misleading signals, where the person knew or ought to have known they were false. Both have applied since 30 December 2024.
  5. Paid promotion adds another layer. In the US, Section 17(b) of the Securities Act, 15 U.S.C. §77q(b), makes it unlawful to describe a security for pay from an issuer, underwriter or dealer without fully disclosing that pay (lesson 5.3.1); undisclosed allocations to promoters are covered in lesson 5.3.3. For group members, the economics matter as much as the law. A pump announced to thousands needs buyers after the organisers, and the last buyers supply the exit for the first. Because purchases are recorded on public blockchains, organisers’ early buys and quick sales are often visible afterwards, which is why such evidence appears in so many charging documents.
  6. Builders face the same risk from the other side. A team that seeds a group, pays callers, or times its own sales to a coordinated push may be treated as part of the scheme, whatever the group is called. A practical check before acting on any call: search the token’s early trades for wallets linked to the caller or group, see whether they bought shortly before the announcement, and look for any statement of the caller’s own position and payment. If those facts are hidden, the call is advertising for someone else’s exit, and the law in several places treats the hiding as the wrong.

Key facts

  • An indictment unsealed in Manhattan on 5 March 2021 charged John McAfee and Jimmy Watson over an alleged ‘scalping’ scheme of touting altcoins on Twitter without disclosing that they held them and then selling.
  • John McAfee died in June 2021 in prison in Spain before he could be tried on the US charges.
  • On 14 December 2022 the SEC charged eight social media influencers over an alleged $100 million scheme to manipulate stocks promoted on Twitter and Discord.
  • On 2 October 2025 the Fifth Circuit, in United States v. Constantinescu, reversed the dismissal of the related criminal indictment and remanded the case.
  • MiCA Article 91(3)(c) treats voicing an opinion on a crypto-asset after taking a position and profiting from it, without disclosing the conflict of interest, as market manipulation.
  • 15 U.S.C. §78i(a)(2) applies to a person acting alone or with one or more other persons in a series of securities transactions aimed at inducing others to buy or sell.

Exercise nine, six, three, one

9CollectList up to 9 features of a trading group or influencer ‘call’ you have seen, such as a countdown to buy, a price target, a claim of insider knowledge, a disclosure of holdings, or a paid sponsorship notice.
6ClusterSort them into 6 categories: timing instructions, price claims, claims about information, disclosures of the caller’s position, disclosures of payment, and community or entertainment content.
3DistillReduce the 6 categories to 3 groups: features that suggest the organisers profit from members’ buying, features consistent with honest opinion, and features you would need on-chain data to judge.
1CrystallizeWrite 1 sentence explaining, in your own words, what has to be hidden for a group ‘call’ to become scalping or market manipulation.

Fact check

Dates, figures and claims checked against the published sources listed below.

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