How to Identify a Ponzi

[nrd525]

http://www.coindesk.com/digital-currency-pyramid-scheme-operators-jailed-in-spain/

[Christyfrazier]

http://www.coindesk.com/digital-currency-pyramid-scheme-operators-jailed-in-spain/

Good to see some of the ponzi owners and getting some legal action taken against them
at least some people might think twice before they do these kinds of scams.

[nrd525]

Madoff victims are getting some of their money back:
http://www.bloomberg.com/news/articles/2015-12-04/madoff-victims-get-holiday-treat-with-1-1-million-checks

[nrd525]

SEC seeks $10 million judgment against GAW Miners
http://www.coindesk.com/sec-seeks-10-million-default-judgment-against-gaw-miners/

[choppork]

It very easy to identify which websites are a ponzi that will run away after a short period of time.

1. The website's template is similar to other ponzi websites. I know you guys have experienced this. An investment site that has a very similar look to another investment site is very obvious that it is a ponzi.

2. They use paypal. Paypal's buyer protection does not cover digital goods. In this way, there will be no way for you to dispute your payment if you choose the digital goods as the type of thing that you bought. The ponzi admins can easily run away this way.

3. They pay high. One thing about ponzi scams are they always pay high, this will surely attract investors especially the newbies.

4. The have high referral awards. Another way to attract investors. Some people just spam the referral and don't invest at all. They keep on pushing in social medias to make people register under their account. This promotion will make the website more popular. Thus, ponzi can easily finish their job and runaway.

5. Payment status: Pending. Pretty sure all the people out there that has invested in a ponzi scam has experienced this. Before ponzi run away, they will keep your pay-out as pending. And of course, they will not pay you.

6. "There's a technical problem." They always say there is a technical problem that leads to not paying your pay-out requests. But they do not provide any proof or any screenshot. You should know that the admins are now packing up and are starting to leave when this happens to you.

Always keep in mind what I mentioned above. People should be aware of the ponzi scams out there. Some websites might pay at first, but of course they will run away after a period of time. They are just waiting for big investors to come. Goodluck on investing!

[coupable]

after all what i read i still can't identify a Ponzy !!!!
Ponzy is a deceptive person using BTC. Is this the Ponzy??

[nrd525]

Trendon Shavers gets 18 months:
http://www.coindesk.com/bitcoin-ponzi-scheme-18-months-prison-bitcoin-savings-trust/

[mammabitcoin2u]

after all what i read i still can't identify a Ponzy !!!!
Ponzy is a deceptive person using BTC. Is this the Ponzy??

One would think you wouldn't know what a Ponzi is, being a "newbie" with a few posts

Then ya look a little further and say.........why play stupid?  

edit to not hi-jack:

Ponzi's are spotted with a "too good to be true" promise.  The old saying, if it's too good to be true, it probably is.  Or change it up to: If it's too good to be true.  It's a SCAM/PONZI.

On this board, I've noticed bought accounts (like yours) or new accounts is always a great start for smelling shit's coming 

And a few other's I'll save for a later time.

[nrd525]

Long interview of Trendon Shavers, Bitcoin Savings and Trust:

https://www.reddit.com/r/Bitcoin/comments/4yl7do/mt_gox_might_have_been_insolvent_as_early_as_july/

I'm skeptical about everything he says and the hosts are extremely gullible.

[nrd525]

So the hosts general view was that Trendon Shavers was just a regular Bitcoin enthusiast who ran a business that accidently turned into a ponzi scheme.  What do people think?  I'd love to see some fact checking on what he said.

Trendon claims that he was lending out money to people who needed it at a mean rate of 10.4%/week (and then he paid 7% interest to his "investors").  For one thing, I know that the top rate for lending out money on Bitcoinica was fixed at 20% APR (by contrast at BFX the first year the APR was over 100% -- this was both long after the ponzi ended and not anywhere near enough to pay 7%/week). So he couldn't have made significant money doing that. 

I'd be very surprised that anyone would want to borrow at those rates and there is no way that arbitrage (or selling locally) was that profitable.  The current bitcoin and USD P2P lending services have much lower rates (20-50% APR for BTC and 10-20% APR for USD).

One possibility is that people were borrowing BTC from Trendon with the intention of building trust, borrowing more, and then running off with it.  And this is what he says happens - though he refuses to name these people.  The story would only be credible if he has names.  I think the SEC (or a class action lawsuit) would want to go after them to get the money back for the ponzi scheme investors.

[nrd525]

Possible miner ponzi scheme in India.  I haven't checked it out, but if they are really promising a 10% return per month you all know what that indicates...
http://coinjournal.net/founder-india-based-bitcoin-mining-pool-gbminers-running-ponzi-scheme/

Now you could get very rich doing bitcoin mining (or more accurately employing cheap labor and you focus on supervising), but the best way is you get lucky with your timing.  You ideally want declining BTC prices for a year or so - so miners are in decline, and then you start up your mining business and the BTC prices take off.  So you make a killing because your costs are flat and your revenue just tripled.  If this happened you could earn 10%/month, but it wouldn't be predictable.  You could also lose 30% month or gain 30%/month.

[nrd525]

Paper on ETH based ponzi schemes.  Found over 100 of them, but only involving 40k ETH and seems to have declined since the DAO hack.  I wonder if some of the larger schemes are more smartly disguised (ex. mining)?

https://arxiv.org/pdf/1703.03779.pdf

[nrd525]

SEC rules against GAW Miners and Zen Miner
http://www.coindesk.com/sec-wins-11-million-default-judgment-gaw-miners/

[nrd525]

Stellar Lumens isn't a pure ponzi but has some questionable practices. They give away coins to BTC holders, and then profit by holding on to a large number of them.  The victims of the ponzi are the people who buy the (probably) worthless coins.

https://www.stellar.org/blog/bitcoin-claim-lumens-2/

[nrd525]

Bitcoin Connect is a likely ponzi.  Offering 1%/day interest (variable) for a "trading bot" which is very similar to the story that Bitcoin Savings and Trust used.  While the official offer is 0.1 - 0.25% minimum, the actual returns they are giving people are closer to 1%/day.

They are also behind BitConnect coin which somehow has the 14th top market cap on CoinMarketCap.com.

I'm contacting CoinMarketCap.com to have them delisted and urge you to do the same.

[nrd525]

BitConnect is an above average professional ponzi.  So it fools more people than average.  Other major new ponzis are Aurum Bank and Control Finance.

Some of these ponzis have large referral fees, and a lot of the Youtubers that are promoting them are making their money on the referrals.  There might also be some people running ad-campaigns to make money on referral fees (I've seen rumors, but no direct evidence).

[nrd525]

Regal Coin is the latest big ponzi.  Apparently a spin off of Control Finance.

Does anyone have suggestions on how to shut down ponzi ads on Google?  (Control Finance used to have them)
And how can we shut down Youtubers who are promoting ponzis?

Looks like Control Finance is shut down for good.  They are trying to spin off a new site and shut down the old ponzi. Very ambitious!

[nrd525]

I started reporting some Bitconnect ponzi Youtubers.  I think I'm getting timed out by YouTube after only reporting 5 (I hit Submit and get a spinning cursor that doesn't acknowledge my report).  So if other people would like to join this campaign and report a couple people (until you also get timed out), that would be appreciated!

I'm using Firefox.  It is very easy to report a video as promoting a Scam.

It looks like there might be as many as 100 people promoting Bitconnect on YouTube.

[nrd525]

First time I heard of this one!  I can only imagine how many medium sized ponzi schemes are using Bitcoin...
https://www.coindesk.com/cftc-sues-new-york-man-over-alleged-600k-bitcoin-ponzi-scheme/

[nrd525]

In the US you can report ponzis to the SEC. I just reported BitConnect (not entirely sure it submitted properly - so if a couple other people would like to do this as well, that would be great).

https://denebleo.sec.gov/TCRExternal/questionaire.xhtml