How to Identify a Ponzi

[nrd525]

https://www.coindesk.com/cftc-lawsuit-alleges-147-million-in-bitcoin-defrauded-from-trading-scheme-investors

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[nrd525]

Coinexx ponzi...
https://www.coindesk.com/scammer-taunts-couple-who-lost-thousands-in-bitcoin-fraud

[nrd525]

Tron related ponzi.  Not sure about this article though. They say "billion dollar" and the "at least 20 million" which are very different figures!  Maybe due to the problem where ponzis can have a large difference between the amount invested and the amount that that ponzi stated the investment was worth. We should be using the amount invested as the amount lost (or control it for inflaation or a modest rate of return like a treasury bill), but some people claim the inflated amount.

But still a ratio of 50 is hard to believe.

https://decrypt.co/7752/tron-china-ponzi-justin-sun

Are there any crytpo ponzis from 2017 that have survived the bear market? 

[nrd525]

https://www.coindesk.com/crypto-ponzi-scheme-says-it-has-no-cash-to-pay-out-to-upset-investors

Has anyone done a research study that estimates the amout of investments and/or investors in Bitcoin ponzis by year?  It'd be fascinating to see whether/how the ponzis follow the cycles of the bitcoin price.

[nrd525]

"Ukyo" loan scheme from 2013 finally goes down in the courts!  That took a while!
https://www.coindesk.com/ceo-of-bitfunder-exchange-gets-14-months-in-prison-for-fraud-obstruction

[nrd525]

Plus Token scams 70k btc.

https://www.youtube.com/watch?v=-OLUbYEk_Q8

https://cointelegraph.com/news/3b-ponzi-scheme-is-now-allegedly-dumping-bitcoin-by-the-hundreds

[nrd525]

No idea who is behind this website, but lots of ponzis and other scams are profiled.
https://behindmlm.com

[nrd525]

A ponzi scheme that made a charitable contribution to increase its reputation, wow.

"BitClub has long been an active player in the crypto space too. The pool claimed to receive $136,000 as part of an errant bitcoin transaction fee, of which it donated half to the Bitcoin Foundation in 2016. "
https://www.coindesk.com/us-arrests-3-in-alleged-crypto-mining-pool-fraud-scheme

[tmfp]

A ponzi scheme that made a charitable contribution to increase its reputation, wow.

"BitClub has long been an active player in the crypto space too. The pool claimed to receive $136,000 as part of an errant bitcoin transaction fee, of which it donated half to the Bitcoin Foundation in 2016. "
https://www.coindesk.com/us-arrests-3-in-alleged-crypto-mining-pool-fraud-scheme

For five years I've been waiting to read that.....

https://bitcointalk.org/index.php?topic=1152263.0
https://www.justice.gov/usao-nj/press-release/file/1224926/download

[nrd525]

Do the Ontario securities regulators not understand what ponzis are?  Or is someone terribly misquoted?  A ponzi is not any ripoff scam, it has to pretend to be an investment that also delivers a return from the incoming funds.   Quadriga was a scam exchange, not an investment vehicle with a promised rate of return.

https://www.coindesk.com/quadriga-was-a-ponzi-scheme-ontario-securities-regulator-says

[nrd525]

I've been neglecting this thread. Please post all the latest and greatest ponzis!

Friendly reminder that Hex is a SCAM, but not all scams are ponzis (and Hex doesn't appear to be a ponzi).

$6.9 million ponzi
https://www.coindesk.com/sec-enforcement-action-alleged-ponzi-scheme

[nrd525]

https://www.coindesk.com/crypto-options-ponzi-scheme-operator-firm-ordered-to-pay-32m

[nrd525]

SafeMoon is a scam not a ponzi.


Do most yield farms require a deposit fee? I was watching a video where they had a 4% deposit fee and promised an extremely high APR (like 1000%) but in a token which had a price that was going to fall to zero.  The presenter explained that it was essentially a ponzi scheme where the latecomers are paying the early birds with the deposit fee - and everyone is trying to sell the token before it is worthless.

If so, a lot of yield farms are ponzis.

[nrd525]

https://www.coindesk.com/sec-secures-judgments-against-3-in-bitconnect-scam

[nrd525]

Olympus DAO (aka Ohm) and its clones are ponzis.  They use an artificial lock up period to have new users pay off old users.  It's also only backed by a small fraction (I read that only 5% of Ohm was covered at one point) of hard assets - the rest of the backing is in Ohm which can, and likely eventually win, go to zero.

If someone knows of a good write-up that explains how the Ohm ponzis work, please post a link!

A lot of people are promoting these ponzis on Youtube and probably elsewhere on social media.  Which is illegal if you are in the US and many other countries.

[nrd525]

https://www.youtube.com/watch?v=gARBeNaN-fk

[nrd525]

UST and Luna.
Not a traditional ponzi, but it has ponzi elements.  Notably a promised stable return that was in excess of what it was earning.  A claim that it relied upon an algorithm - in fact it was more an appeal to authority (smart/rich people like it) and ultimately it's backed by assets that can go to zero.
https://coinmarketcap.com/currencies/terrausd/

Admittedly I liked it enough to almost invest (it seems like they have a valid use case and some adoption in South Korea?).  But fortunately I didn't.

[nrd525]

Celsius Network ended up being the most advanced ponzi we've seen so far!  Super slick CEO, US presence, institutional backers and lower interest rates made me believe that they had a valid business model!  They probably had a partially valid business model, especially when they could profit from the GBTC premium trade.

I ended up losing money to this (though less than I made on interest on Blockfi + Celsius). Though fortunately I had most of my funds on other sites, and they are now on my hardware wallet.

Capitalism is based on legalized theft (and legalized state violence).

[Bitcoin_Arena]

Celsius Network ended up being the most advanced ponzi we've seen so far!  Super slick CEO, US presence, institutional backers and lower interest rates made me believe that they had a valid business model!  They probably had a partially valid business model, especially when they could profit from the GBTC premium trade.

I ended up losing money to this (though less than I made on interest on Blockfi + Celsius). Though fortunately I had most of my funds on other sites, and they are now on my hardware wallet.

Capitalism is based on legalized theft (and legalized state violence).

I wonder why most people didn't see it coming. All those so-called DeFis and yield farms are not sustainable in the long run. Someone has to lose money even when they have been promised a certain APY right before locking up their funds.

My General rule is any platform or token that locks up your funds with the promise of a certain percentage profit daily, weekly, monthly or yearly is a Ponzi.

[nrd525]

I think people didn't see it coming because the APYs were so low. Also there were legitimate use cases that could make a low-risk APY - notably lending your money to people going short or long (which I did from 2013-2017 on Bitfinex for > 10%/APR for USD (Bitcoin rates were far lower)).

It's possible that long term rates could be fixed (and not a ponzi) by arbitraging spot vs futures (short futures, buy spot).  During the bull market this was very profitable.