Both scams involve pressuring individuals into investments with misleading claims. In pump and dump schemes, scammers artificially inflate a stock’s price before selling off their shares at a profit, leaving investors with worthless holdings.

However, boiler room fraud typically involves persistent cold-calling to sell fake or overvalued stocks. While both rely on deception and high-pressure tactics, boiler room scams focus on direct sales, whereas pump and dump scams manipulate market hype.

Both scams deceive investors, but rug pulls are exclusive to cryptocurrency. In a rug pull, developers create a crypto project, attract investors, then suddenly withdraw all funds and disappear. Pump and dump scams can involve any financial investment—crypto, stocks, or others—by inflating prices before selling off, which causes the market to crash. While rug pulls focus on outright theft, pump and dump scams rely on market manipulation.

Yes, pump and dump scams are illegal because they manipulate stock prices for fraudulent gains. Scammers promote a potential investment —often with false claims—and invest heavily to inflate its value. This attracts more investors, driving prices up.

Once high enough, scammers sell their holdings, causing a sharp price drop and leaving others with losses. These schemes often involve multiple fraudsters working together to maximise profits.