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SCAM ALERT

- Ponzi Scheme -

Estimated time to read: 2 Minutes

Freegenday

Where can you find this scam?

Everywhere were you can find investments

The Ponzi scheme was named after Charles Ponzi, who made an estimated $5.13 million with his scam. Another man, Bernard Madoff made $64 billion and inspired the movie “The Wolf of Wall Street”.

Wolf of Wall Street

So - What is a Ponzi Scheme?

A Ponzi scheme is a special kind of fraud. It is based on a fake investment in which an schemer or more than one schemer gets other people to give them money.

In Ponzi schemes, the schemer basically says:”I have found a great way to make money very quickly. The more you give to me, the more I can invest in this specific and complex thing and the more I can earn for all of us.”

But a Ponzi scheme doesn’t really make money. Instead, all the system’s money comes from investors.

The Crash

 

As soon as a Ponzi system has too many investors, the system will always crash(at some point- remember: Madoff made it to $64BILLION). This is because investors are all expecting more money than they have invested, and they will become impatient.

These schemes always stop one of three ways:

  • The schemer flees with the money they got. That’s what the schemers are trying to do.
  • The schemer is running out of money; he won’t be able to promise money back immediately. This is called liquidity, leaving investors in a state of panic and demanding their money back, often at once.
  • The authorities inform themselves about the program and stop it.

Ponzi schemes can be run anywhere, even online, and are still running now.

Protect yourself - spot signs of the Ponzi Scheme

Ponzi schemes often use impressive words for advertising, that are actually vague. For example:

  • Hedge Futures Trading (taking good risks)
  • High-yield investment programs (gives you back a  ton of money)
  • Offshore Investment (makes money very easy in other countries) 

They try to impress you with complex economic stuff.

  • They have a very unclear business model and say that it is “secret”. They will make it as untransparent as possible.
  • Aggressive sales techniques that use “testimonies” telling you how much they have earned(and how fast).
  • You will be asked to spread the word and bring in more investors.
  • No ‘bad’ investment years, always consistent returns.
  • Promised guaranteed returns.
  • If you ask questions they will grow aggressive quickly.
  • Payment takes a lot of time.

Spread the word

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