Perseus: New Tool Tracks Crypto Pump-and-Dump Schemes
A team of computer scientists and financial specialists at University College London has created a new tool, called Perseus, designed to track the coordination efforts of individuals who manipulate the cryptocurrency market through pump-and-dump schemes. The researchers published their findings on the arXiv preprint server, detailing Perseus’ functionality and purpose.
PERSEUS consists of three components: real-time fetcher, temporal attributed graph generator, and mastermind detector. Credit: arXiv (2025).
Cryptocurrencies currently operate with minimal regulation, which makes them a high-risk investment. In this study, the research team suggests that fewer than 500 major players, whom they identify as “masterminds,” are actively working to profit from these schemes. These individuals orchestrate pump-and-dump operations, where they aggressively promote a specific coin to inflate its value, enticing others to buy. They then sell their holdings when the buying frenzy reaches a peak, securing substantial profits.
The researchers note that much of the hype and coordination for these schemes takes place on messaging platforms like Telegram, where discussions between potential buyers and sellers occur. To gain insights into these market activities, the research team developed a system capable of analyzing messages exchanged on Telegram. Their analysis revealed not only the presence of masterminds but also “accomplices” who spread the masterminds’ messages, further fueling the hype.
Using Perseus, the research team detected 438 masterminds collectively responsible for approximately $3.2 trillion in artificial crypto coin trading. These individuals are estimated to generate around $250 million in annual profits through these manipulative practices.
In reviewing the Telegram messages, the researchers highlighted the ease with which these schemes are executed, expressing concern for those attempting to profit from cryptocurrency investments. They suggest that regulation may eventually become necessary to sustain the system, as those being scammed may lose confidence and the whole system may collapse.
Reference: Honglin Fu et al, Perseus: Tracing the Masterminds Behind Cryptocurrency Pump-and-Dump Schemes, arXiv (2025). DOI: 10.48550/arxiv.2503.01686
