The structure is a pyramid of information. Organisers and paying tiers accumulate first, a public signal creates the buying wave, and the early tiers sell into it. By the time a typical member acts, the profitable side of the trade is already taken.
Academic work on these groups has found that most participants lose money and prices generally return below the pre-pump level within hours. Illiquid small-cap tokens are chosen precisely because a small amount of buying moves them, which also means the exit is thin. See pump-and-dump.
This is market manipulation and it is prosecuted as such in many jurisdictions, including for crypto assets that qualify as securities or where fraud statutes apply. Participation carries legal risk alongside the near-certain financial loss.
Related: pump-and-dump, exit-liquidity, wash-trading-crypto, market-manipulation