What is a Ponzi Scheme? - Top 5 biggest Ponzi Schemes in crypto world

[Leonardo]

Ponzi Scheme definition
Ponzi Scheme is a from of scam which takes money from new investors to pay older investors. People taking part in Ponzi Scheme are lured to believe that their returns are from ligitimate sources and are encouraged to attract new investors through referral bonuses. In fact, Ponzi Scheme collapses when there’s no more newcomer.

Origin of Ponzi Scheme
The scheme was named after Charles Ponzi in 1919. At that time, the postal service developed something called “international mail coupon”, allowing mail receivers to buy priority airmail postage stamps needed to send replies. Realizing the fluctuation of stamps price, Ponzi planned to make money by buying stamps at low prices (with mail coupons) and then sell them at higher prices (this also known as a type of arbitraging).

The story didn’t end there. Greediness made Ponzi expanded his business. He sought investors and promised them a return of 50% in just 45 days. But instead of focusing on stamp arbitraging, Ponzi paid old investors by new investors’ money. Ponzi was so success that he made $ 420,000 (approx $5.13 mil in 2017 money) by May 1920. Charles Ponzi was arrested on August 12, 1920 and sentenced 14 years in jail.

Ponzi Scheme Red flags
The most prominent sign of Ponzi Scheme is high investment returns with low risk. Of course, everybody may have heard of “high risk, high return” but people are usually blinded by their greediness, especially lesser educated people. 1% per day, 50% in 45 days or any returns that distant from bank interest rate are suspicious. Other indicators are:
-   Consistent returns regardless of market situations
-   Lack of transparancy: no name, no contact nor office addresss
-   Difficulty withdrawing investment

How to avoid Ponzi
It’s very difficult to cash out once you’re involved in Ponzi Scheme. So the only way to avoid Ponzi is to stay away from it and report to authority. Keep your head cool before fancy words of other people, something like risk-free, high return…

Top 5 most famous Ponzi Schemes in crypto world
1.   Bitconnect: Initially being released on early 2016, bitconnect had a long journey in crypto world before being accused by the US government in early 2018.
2.   Pincoin & iFan: Lesser educated people are the easiest to fall for scams. This is an ordinary example.
3.   OneCoin: Rather than Pincoin & iFan, OnceCoin is a multinational scam, involving in India, Thailand, Croatia, Bulgaria, Norway and Finland.
4.   Regalcoin: Combining MLM and Ponzi, Regalcoin used to be very famous in South East Asia before collapse following other Ponzi coins such as Bitconnect.
5.   Hextracoin: Following Regalcoin’s footstep, Hextracoin had a short time of success in late 2017. This Ponzi Scheme made some people rich but also made a lot of people homeless.

[CryptoZenWorld]

This is really true. This ponzi scheme is like great epidemic. At the beginning it spread like a roket and at last it become vanish by taking people's invest..But in the middle some people get benifit and they have to disgrace from other people.
Good Awareness.

[bountyecrire]

bitconnect was superb lol. I still watch this guys video sometimes:

Don't invest in these kind of systems though. Even if they can be profitable in the beginning, they're all going to fail at some point.

[wildanmr]

I think this is unfair activity.
Scamming new investor for their profit.
I don't understand if any people who joined this activity especially for new member of them.

[mightwalker]

We can refuse that a few people took advantages and being rich from them. Nowadays, they can identify this kind of Ponzi scheme easily, but I think in the future, there are many delicate frauds.

[juv3ntus1]

The problem is some people are to greedy,and when sombody tell them a easy way to make money ,don't do any research just  join instant.

[backfirst77]

Ponzi schemes are very detrimental to participants who follow at the lower level. Only leaders and those who participate first can benefit. Because usually in the Ponzi Scheme, they will pay the profits earned from new members who join. So if there are no more new members joining, it is certain that payment will be problematic. For that we must avoid businesses that use this Ponzi Scheme.

[Thegals]

This is a scheme that can be detrimental to participants who follow it, especially new participants. Because this scheme pays the results of each new participant who joins. If there are no new participants who register it is certain that the program using the ponzi scheme will be problematic. So as much as possible we avoid all forms of investment activities that adopt this Ponzi scheme.

[IL Regulus]

The offer is very tempting which makes someone to decide for that. Since greediness is a man's character it becomes the hope of another greedy person to scam his own kind.

[crypto_girl]

Thanks for information. I`ve heard about Bitconnect, and I was sure that it is a ponzi scheme. But I didn`t haer about other projects.

[desi7892]

Thanks for information. I`ve heard about Bitconnect, and I was sure that it is a ponzi scheme. But I didn`t haer about other projects.

You would be surprised how many ponzi schemes that want to profit from the popularity of cryptos are out there.

[mightwalker]

Thanks for information. I`ve heard about Bitconnect, and I was sure that it is a ponzi scheme. But I didn`t haer about other projects.

You would be surprised how many ponzi schemes that want to profit from the popularity of cryptos are out there.

It was a story of the last year, at this time, people beware about this kind of fraudulent. But I think in the future when the market grows again. It'll have more sophisticated scams

[wokee12]

Oh I remember that bitconnect down so much, it company has been closed also regal and hextracoin I'm so lucky not invest in this

[mightwalker]

If you invest in bitcoinnect at the beginning of 2017 and sell at the end of the same year. You'll multiply you assets a hundred times. It's crazy.

[JSD10M]

Bitconneeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeccctttttttt!!!! 
I still remember some of my crypto peers got all hyped with that scam. I told them that it is too good to be true but they just ignore