On cryptocurrency social media platforms right now, traders are glued to a token that has surged 1400% in a week. This is a classic pump-and-dump scheme, but the project has almost no real users; the vast majority of tokens are hoarded in a few inactive wallets. Having witnessed this kind of market movement countless times, he knew exactly what the final outcome would be. So he did what most people would do: open a short position. He was certain the token would crash at any moment, and then logged off to rest. But when he woke up the next day, his short position had already been liquidated. The most unusual key point here is: his judgment was not wrong. This surge itself was a false bubble. He simply didn't understand what kind of opponent he was actually betting against. This is not a fictional story; it's the actual market movement of the MYX token in September 2025. In just one week, the price of MYX skyrocketed from $1.30 to $18.42, while the project itself made no major announcements, product updates, added no new users, and there was no real trading activity on the blockchain. All traders who saw through this fraudulent pump and shorted the market suffered a combined loss of $89.51 million. These tokens are what the industry calls crime coins. The token issuing team locks up the vast majority of the circulating tokens and, in conjunction with market makers, manipulates price fluctuations, trapping all retail investors who bet on both sides. This article will dissect this complete operational chain, the parties controlling the tokens, and why the entire crypto industry has consistently allowed this kind of chaos to flourish. The creation of all crime coins is based on a pre-signed written agreement between two parties. One party is the token issuing project team, and the other is the market maker—the institution that lists orders on exchanges and ensures the token can be traded. This is common throughout the crypto industry; what's truly unique are the internal terms of the contract. The two parties typically adopt a 7:3 profit-sharing model: for every $1 of profit generated from token trading, 70 cents go to the market maker, and 30 cents go to the project team. The contract not only divides the profits but also stipulates in black and white that after the token is listed, the market maker is responsible for "controlling and guiding" the price. The industry euphemistically calls this "price manipulation," but in essence, it's about market makers being hired to arbitrarily raise or lower the price of tokens based on the demand from both sides that month. Looking at data from MYX and numerous other tokens issued using the same template, this model can generate over $30 million in profit in a single cycle. More importantly, market makers acquire their tokens through lending, never actively buying them. This model, known as the lending option model, is the standard paper procedure for projects and market makers in the industry. In the early stages of a token's listing, the project lends a huge amount of tokens to market makers, typically worth tens of millions of dollars.Market makers have a 12-month term, during which they must either return the tokens as is or repurchase them at a pre-agreed high price. However, the rules on paper and the actual operation are vastly different: market makers sell all the tokens they receive on the day they acquire them, dumping a large number of tokens to drive down the price; once the price drops, they buy back the same number of tokens at a lower price and return them to the project team, profiting from the price difference. Criminal coins adopt this lending model and add a second harvesting chain: in addition to selling borrowed tokens to drive down the price for profit, the operators also specifically prey on retail investors who see through the price manipulation and enter the market to short sell in hopes of a crash. For this scheme to operate smoothly, the project team and market makers must have a near-monopoly on all the tokens, which most criminal coins have achieved. More than 90% of the total token supply ultimately ends up in wallets controlled by the same operator. On blockchain explorers, these wallets appear as numerous unrelated addresses, creating the illusion of dispersed holdings by retail investors. However, on-chain traceability analysis confirms that all addresses are deployed by the same entity, splitting them to create the illusion of dispersed token distribution. Taking MYX as an example, the token concentration reached an extreme level: at the peak of the market, only about 20% of the tokens were circulating outside the project team and its affiliates; the remaining 80% were divided into two parts: one part was locked in an ownership contract, completely unsellable; the other part was held by the core team and early investors, theoretically sellable but artificially locked. In either case, these tokens would not enter the market. In conventional crypto tokens, there is a distinction between fully diluted valuation and circulating market capitalization: the former counts the total token supply, while the latter only counts the circulating supply. However, criminal coins directly break this distinction—even tokens shown as circulating supply on the trading board cannot actually be freely traded. This explains why MYX's market capitalization surged from $200 million to $3.35 billion in a week without any new users or external funding injection protocols. The very small portion of tokens actually traded on exchanges set the overall price for the vast majority of uncirculated tokens. A simple check of the basic data reveals a severe disconnect between the price and the project's fundamentals. Total Value Locked (TVL), a common metric in decentralized finance, represents the total amount of funds users deposit into the protocol for product use. During MYX's market capitalization surge to $3.35 billion, its TVL remained consistently between $25 million and $32 million, resulting in a market capitalization/TVL ratio as high as 100. In contrast, leading decentralized protocols like Uniswap and Aave have ratios between 1 and 4. Furthermore, MYX's annual revenue was only about $5 million, yet the market valued it at $17.7 billion, resulting in a price-to-earnings ratio of approximately 3500.Before the public witnessed the explosive growth of MYX, the entire scheme had been in preparation for months. Months before the price surge, the manipulators had already been engaging in wash trading on multiple exchanges, including PancakeSwap, Bitget, and Binance. Wash trading involves the same entity acting as both buyer and seller, artificially inflating trading volume by buying and selling against itself. Trading volume is a key criterion for major exchanges to list and support tokens; creating artificial trading volume on one platform can often push a token onto more exchanges. A review of MYX's trading records reveals that numerous small buy orders across platforms ultimately converged into a single core wallet. A single manipulator created the illusion of genuine market demand through self-buying and selling. The entire scam operated strictly according to a four-step cycle, each step precisely targeting the trading habits of ordinary traders. Step 1: Inducing short selling. Market makers used minimal funds to drive up the price, making the operation extremely easy: the vast majority of tokens were locked, and the order book depth on smaller exchanges like Bitget and Gate was already weak. The shallower the order book, the more capital can leverage a 5% to 10% price increase. The initial price surge isn't for profiting from long positions; the manipulators' real profit comes from subsequent short-selling by retail investors. The core purpose of this step is to make the upward trend appear extremely inflated and unsustainable, attracting cautious traders to short-sell. This counterintuitive logic is the essence of the scam: the more artificial the trend, the more advantageous it is for the manipulators. The second step: setting a trap. Once enough short positions flood the market, the manipulators begin closing some of the long positions used for the price surge, reducing their hedging positions and artificially creating a price pullback, while simultaneously causing a significant decrease in total open interest. The price drop combined with shrinking open interest perfectly presents a top-and-bottom pattern on the candlestick chart. Cautious traders on the sidelines become completely convinced that the market has topped out and rush to short-sell. The third step: short-selling annihilation. Traders who entered the short-selling market begin to suffer consecutive losses. The vast majority of transactions in criminal cryptocurrencies are not spot holdings but perpetual contract transactions. To balance long and short positions, exchanges charge funding fees: every few hours, one side of the market trader pays a fee to the other. In a normal market, this fee is only a few tenths of a percentage point per day. However, in the crackdown phase of criminal cryptocurrencies, the funding fee for short positions skyrockets to -2% every 4 hours. This translates to a daily loss of 12% of principal simply by holding a short position; after a week, ignoring price fluctuations, the principal would be lost by 84%. This is compounded by the high leverage of contracts: short positions in the market commonly use 20x, 50x, and even up to 125x leverage. With 50x leverage, a 2% price fluctuation in the opposite direction will result in a liquidation of the position.Massive short liquidations trigger a chain reaction of panic selling: each liquidated short position forces a buy order to close it, further driving up the price; the rising price then triggers even more short positions, generating even more buy orders. Those traders who accurately predicted the bubble and entered the short market become the biggest support for the continuation of the upward trend. Step Four: High-Level Selling. After all short positions are liquidated and the price reaches its peak, the manipulators switch positions: they open new short positions, close existing long positions, and simultaneously transfer locked-up tokens to centralized exchanges. Many experienced on-chain traders fall for this trap: seeing the manipulator's wallet transferring tokens to exchanges, they instinctively judge that a sell-off is imminent and immediately enter the short market. However, these transfers are actually bait; before the actual sell-off, they harvest another round of short sellers. The core essence of this entire scam: an extremely singular trading counterparty. In the real market, participants have diverse perspectives, holding periods, and information gaps; however, in the criminal coin market, all long and short trades are conducted against the same set of manipulators, using a fixed harvesting template throughout. All operations in criminal coins boil down to one core fact: the project team and its affiliates monopolize almost all token holdings. This monopoly allows a single entity to simultaneously manipulate spot and futures prices, independently determining the pace of price increases and decreases, and the timing of short-selling attacks. No other holders in the market possess enough tokens to break this manipulation. In the MYX market, the futures open interest exceeds the circulating market capitalization, two-thirds of the trading volume is concentrated on the Bitget platform, and short-selling funding rates remain consistently high. Traders entering the market with short positions have perfectly correct technical analyses, yet they never realize they are operating in a manipulated market. All traces are publicly verifiable: cluster wallet addresses, platform trading volume percentages, and market maker information are all disclosed in the project's financing documents. The crypto industry ignores this because the entire value chain profits: market makers earn a cut of trades, project teams inflate national asset valuations with their own tokens, and exchanges collect fees regardless of whether the transactions are genuine or fraudulent. Only ordinary retail investors are the sole group that loses money throughout the entire process. [Foresight News]