Jordan Belfort's Pump-and-Dump and Today's Meme Coins

What does pump-and-dump actually mean?

At its core, a pump-and-dump scheme involves artificially inflating the price of an asset — historically a thinly traded stock, today often a meme coin with no underlying business — through aggressive promotion, coordinated buying, or misleading claims about its prospects.

Once enough outside buyers have been drawn in and the price has risen sharply, the people who orchestrated the scheme sell their own holdings at the inflated price, and the value typically collapses shortly after, leaving later buyers holding losses.

This is the exact structure Belfort's conviction was built around, applied to stocks his firm controlled and promoted. The mechanism doesn't require any particular asset class to function — it works on anything that can be hyped faster than its real value can be verified.

Why are meme coins such fertile ground?

Meme coins are, in a structural sense, close to an ideal environment for running this exact scheme today.

They typically have no underlying business, revenue or asset backing to anchor a 'fair' price against, which means their value is driven almost entirely by attention, hype and social momentum — exactly the inputs a pump-and-dump operator wants to control.

Combine that with how easily a token can be created, promoted and traded on decentralised platforms with minimal oversight, and the modern version of this scheme can be executed with far less infrastructure than Belfort's firm required in the 1990s, while reaching a much larger pool of potential buyers almost instantly.

Meme coins as a category trace back to Dogecoin, a cryptocurrency originally created as a joke referencing an internet meme, which unexpectedly grew into a multi-billion-dollar market and spawned thousands of imitators built the same way.

That origin story matters here: because the category was never built around a business case, revenue or technological utility, it created exactly the environment where price is driven almost entirely by narrative and attention — precisely the ideal conditions for the scheme described above to repeat itself at scale, over and over, with a new token each time.

What has actually changed since Belfort's era?

The core scheme hasn't changed since Belfort's era — what's changed is how quickly it can be executed and how far it can spread.

Running a pump-and-dump through a brokerage in the 1990s required licensed brokers, cold-calling scripts and real operational infrastructure, all of which took time to build and left a paper trail that eventually led to his conviction.

A meme coin scheme today can be organised anonymously, promoted across social media in hours, and cashed out before most participants even understand what happened, which is part of why regulators have struggled to keep pace with the crypto version of a scheme that's actually decades old in its underlying logic.