Pump and dump is illegal market manipulation and at its core an ordinary theft. If it was up to me they should throw these crypto pump and dump scammers in jail and take all their money. And, surprise surprise, they actually do that. Participate at your own perril. The blockchain never forgets, and neither does the US government.
For more info, look into the Brit Navinder Singh Sarao, who was caught by the US government 5 years after his market manipulation. Or watch the Wolf of Wall street, who was basically doing the same thing.
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Good warnings. Whether this is already illegal or not depends on your jurisdiction and their classification of cryptos, but it's not a good idea to tangle with it regardless.
I don't know the exact regulations with new assets like crypto. It could be that pump and dump schemes are always illegal. I believe the Bitconnect people will likely end up in jail for running a Ponzi, even though it was in unregulated crypto.
With respect to jurisdiction, that does not really apply here because some of the pump and dump victims were likely from the US, and that would make a pump and dumpers actions a crime on US citizens. Someone may not get arrested in their home country but would when entering the US. In an extreme case, the US might even petition an extradition.