Over the past several days, investors have witnessed sudden gains in volume and extreme price volatility for litecoin. In the last week litecoin has gained over 79 percent against bitcoin, 88 percent against the U.S. dollar and 90 percent against the euro and the yuan.
Much of the rapid increase in volume around litecoin trading was coming from Chinese markets, which is cause for concern at Huobi, a major digital currency exchange based in Beijing.
According to Arthur Hayes, the Cofounder and CTO of BitMEX, a litecoin ponzi scheme may have caused both bitcoin price and volume increases on Chinese digital currencies exchanges in the last few days.
Huobi CEO Leon Li told Bitcoin Magazine that the exchange had taken steps in the wake of the so-called “pump and dump” litecoin scheme.
Read more: Bitcoin Magazine