Ponzi Schemes are illegal right?

[AverageGlabella]

In most countries Ponzi schemes are illegal and looking at the rules discussion of illegal activities or selling of illegal things are not allowed.

Why are they not moderated in this is the case? Ponzi schemes are usually easy to spot as these days there is not much of an effort that gets put in them. I know the current stance of the forum against ponzi schemes is they are not removed.

I want to know why this is if they are illegal in the majority of the countries. Doesn't this forum have to follow the laws that its hosted in?

[Vod]

I want to know why this is if they are illegal in the majority of the countries. Doesn't this forum have to follow the laws that its hosted in?

I believe it does not apply since the forum didn't create the content - it just hosts it.

Ripoffreport has been using this legal "loophole" - successfully - for years.

[jackg]

In most countries Ponzi schemes are illegal and looking at the rules discussion of illegal activities or selling of illegal things are not allowed.

Actually I don't think ponzis are inherantly illegal. If you tell people in your terms and conditions and they agree to them, then it's up to them whether to follow it or not.
False advertising is the illegal part not the idea behind it.

I want to know why this is if they are illegal in the majority of the countries. Doesn't this forum have to follow the laws that its hosted in?

The forum is supposed to be quite impartial it would take a lot of effort to ge through and delete everything that was a ponzi or everything that looks like a ponzi.

[khufuking]

There scam ICOs too and forum not remove it, that does not mean they agree with it, that is why there is DT members if you report a Ponzi schemes project or a post advertising Ponzi schemes website they will get instant tagged by DT members same as reporting ICOs .

[marlboroza]

I want to know why this is if they are illegal in the majority of the countries. Doesn't this forum have to follow the laws that its hosted in?

I am sure ponzi is illegal in all countries.

Actually I don't think ponzis are inherantly illegal. If you tell people in your terms and conditions and they agree to them, then it's up to them whether to follow it or not.
False advertising is the illegal part not the idea behind it.

Nonsense.
To be honest this is very interesting topic.

For example, if someone try to sell fixed sport games, topic will be removed because it is illegal to sell fixed games.
Ponzi is also illegal but it is not moderated.

Why are fixed sport games moderated? I mean, both are illegal and both are scams.

[pugman]

It depends on country to country depending upon the laws (?). There are loopholes or hidden agendas in these ponzi schemes sometimes which may cover things up, but yeah in most cases it is illegal. Read this for more information : https://www.quora.com/Why-is-a-ponzi-scheme-illegal

[jackg]

Actually I don't think ponzis are inherantly illegal. If you tell people in your terms and conditions and they agree to them, then it's up to them whether to follow it or not.
False advertising is the illegal part not the idea behind it.

Nonsense.

http://qr.ae/TUpsAM
http://qr.ae/TUpsAU

From the link posted above here are two examples.

In the most upvoted reply: social security does the same thing. There are other things that function in the same way, if you think of the financial crisis of 2009 was due to banks becoming more like ponzi schemes and not having enough actual money in their posession and being in too much debt with the government banks. If you think also about insurance companies, sure they have methods of reducing the amount they have to pay if they really need to and to sort out other stuff, but if thousands of people needed to claim against a few million dollars of losses each, that insurance company would collapse.

[marlboroza]

It depends on country to country depending upon the laws (?). There are loopholes or hidden agendas in these ponzi schemes sometimes which may cover things up, but yeah in most cases it is illegal. Read this for more information : https://www.quora.com/Why-is-a-ponzi-scheme-illegal

Excuse me, but in which country is investment fraud legal?

Actually I don't think ponzis are inherantly illegal. If you tell people in your terms and conditions and they agree to them, then it's up to them whether to follow it or not.
False advertising is the illegal part not the idea behind it.

Nonsense.

http://qr.ae/TUpsAM
http://qr.ae/TUpsAU

From the link posted above here are two examples.

In the most upvoted reply: social security does the same thing. There are other things that function in the same way, if you think of the financial crisis of 2009 was due to banks becoming more like ponzi schemes and not having enough actual money in their posession and being in too much debt with the government banks. If you think also about insurance companies, sure they have methods of reducing the amount they have to pay if they really need to and to sort out other stuff, but if thousands of people needed to claim against a few million dollars of losses each, that insurance company would collapse.

https://en.wikipedia.org/wiki/Ponzi_scheme

It is scam, it is illegal and it is investment fraud. I am not sure which part of that you don't understand.

[pugman]

Excuse me, but in which country is investment fraud legal?

Like I said, there are loopholes in these, in legal terms. I did read somewhere that, if a particular investment which looks like a ponzi and has failed in its capital raising, it may not be illegal. I am not very much sure on this, but I do know that there are loopholes to get out of legal consequences.

[jardel1905]

When I see Ponzi I automatically think of Bitconnect, do you think stuff like bitconnect should be legal, stealing money of thousands of people?

[The Sceptical Chymist]

Actually I don't think ponzis are inherantly illegal. If you tell people in your terms and conditions and they agree to them, then it's up to them whether to follow it or not.

I'm not a lawyer by any means, but I don't think that's true.

I just posted in another thread where MagicSmoker asked if Ponzis were moderated here, and in the thread he was referring to, it wasn't explicitly stated that the offer was a ponzi--and most of them are like that anyway.  Those are illegal, I'm pretty sure.  When I posted my answer, I was wondering the same thing as OP.  Bitcointalk doesn't allow other illegal things, like drugs & kiddie porn, so I don't know why it lets people offer up Ponzi schemes as investment opportunities.

[digaran]

Actually I don't think ponzis are inherantly illegal. If you tell people in your terms and conditions and they agree to them, then it's up to them whether to follow it or not.

I'm not a lawyer by any means, but I don't think that's true.

I just posted in another thread where MagicSmoker asked if Ponzis were moderated here, and in the thread he was referring to, it wasn't explicitly stated that the offer was a ponzi--and most of them are like that anyway.  Those are illegal, I'm pretty sure.  When I posted my answer, I was wondering the same thing as OP.  Bitcointalk doesn't allow other illegal things, like drugs & kiddie porn, so I don't know why it lets people offer up Ponzi schemes as investment opportunities.

There is nothing about legality of something here, there is only the question of greed and stupidity.

[xtraelv]

Pyramid schemes are illegal. They are often hard to destinguish from MLM which is legal (but dodgy). Pyramid schemes often target people in developing countries where such schemes are illegal but usually not prosecuted. Pyramid schemes and their participants will always claim they are legal or "unregulated" and will continue claiming it till they are prosecuted.

The question is what do you ban or moderate ? Pump and dump coins are scams too. High return masternode coins will eventually fail too. Just like a ponzi.

KYC account sales are illegal too.

[xtraelv]

I want to know why this is if they are illegal in the majority of the countries. Doesn't this forum have to follow the laws that its hosted in?

I believe it does not apply since the forum didn't create the content - it just hosts it.

Ripoffreport has been using this legal "loophole" - successfully - for years.

Interestingly that loophole tends to work with criminal law but usually not with civil law. A website can be held accountable (at least in commonwealth jurisdictions) for defamation if they publish untrue statements.

Although "didn't create the content" arguement isn't working well for pirate bay, silk road or kim dotcom.

In March 2017, the Italian Data Protection Authority affirmed that Ripoff Report's activities — namely, Ed Magedson's requests for money to edit web pages — are illegal in Italy. The Italian authorities also noticed that Ripoff Report's web servers are occasionally not reachable from Italy in order to evade controls by the authorities themselves. Besides, they noticed that some web pages — which were being investigated by the authorities — were deleted out of the blue by the website owner, despite the claim that Ripoff Report does not remove reports.

A federal court stated that victims have "probable cause to sue for extortion and racketeering". http://en.m.wikipedia.org/wiki/Ripoff_Report

[Flying Hellfish]

if they publish untrue statements.

There is a difference between a publisher and a distributor. 

Think about a newspaper vs the newspaper stand (or bookstore, corner store selling newspapers etc).  One can be held liable the other is generally not.

Forums do not create (publish) content they simply distribute it.  The author publishes the post, the forum distributes it.

Forums can be looked at as the equivalent to a brick and mortar bookstore.  A book store is not required to read every sentence of every book and then vet it legally everywhere its sold, neither is a forum.

Unless the forum changes a post and or specifically endorses it courts have for the most part regarded forums as distributors.

Vod is correct and it is not a loophole it's put in place to not restrict freedom of speech, if the distributors had to vet and take responsibility for everything they distributed they would ultimately sell significantly less material for fear of liability in any area they sold (which could be wildly different).  This puts the liability exactly where it should, the person making the statements and not the person/company distributing the information.

[xtraelv]

Unless the forum changes a post and or specifically endorses it courts have for the most part regarded forums as distributors.

Vod is correct and it is not a loophole it's put in place to not restrict freedom of speech, if the distributors had to vet and take responsibility for everything they distributed they would ultimately sell significantly less material for fear of liability in any area they sold (which could be wildly different).  This puts the liability exactly where it should, the person making the statements and not the person/company distributing the information.

In case of bitcointalk they are doing the right thing. They remove posts when directed by law enforcement.

The ripoffreport however is a different story. The wheels are finally falling of:

http://www.phoenixnewtimes.com/news/the-real-rip-off-report-6445677
http://drjaniceduffy.com/2017/05/ed-magedson-ripoff-report-darren-meade-sued-for-60-million/
http://drjaniceduffy.com/2017/05/ed-magedson-ripoff-report-darren-meade-obstruction-of-justice/

[gstar - ross]

May not be an expert of the law here, but I can safely say pyramid schemes are illegal in all countries. The problem I feel is that investors still have the mindset that if they are not the last ones to enter the scheme, they can make money out of it (which is technically true). So I believe the problem that pozi schemes still pop up is because there's always demand for it, "intelligent" people trying to be the early adopters of it and hoping that others will follow suit after them. At the end of the day, it becomes a game of who arrived first and who arrived last. We need the help of the whole community to report it as soon as it surfaces, that's the only way I believe we can stop such scammers from getting undeserving profits from others

[jackg]

It depends on country to country depending upon the laws (?). There are loopholes or hidden agendas in these ponzi schemes sometimes which may cover things up, but yeah in most cases it is illegal. Read this for more information : https://www.quora.com/Why-is-a-ponzi-scheme-illegal

Excuse me, but in which country is investment fraud legal?

Actually I don't think ponzis are inherantly illegal. If you tell people in your terms and conditions and they agree to them, then it's up to them whether to follow it or not.
False advertising is the illegal part not the idea behind it.

Nonsense.

http://qr.ae/TUpsAM
http://qr.ae/TUpsAU

From the link posted above here are two examples.

In the most upvoted reply: social security does the same thing. There are other things that function in the same way, if you think of the financial crisis of 2009 was due to banks becoming more like ponzi schemes and not having enough actual money in their posession and being in too much debt with the government banks. If you think also about insurance companies, sure they have methods of reducing the amount they have to pay if they really need to and to sort out other stuff, but if thousands of people needed to claim against a few million dollars of losses each, that insurance company would collapse.

https://en.wikipedia.org/wiki/Ponzi_scheme

It is scam, it is illegal and it is investment fraud. I am not sure which part of that you don't understand.

I'd define a Ponzi scheme as different to what is suggested there. But in their case, there isn't a legitimate version of it.

By definition[1], a Ponzi scheme (/ˈpɒnzi/; also a Ponzi game)[2] is a fraudulent investment that involves the payment of purported returns to existing investors from funds contributed by new investors. It is an investment system where the investment profits are paid with the money from other investors, and those who experience profit believe the profits come from non-investors such as business activities, or the earnings and growth of a company.

As they claim it's not outrightly stated there so that is an illegal Ponzi.

[simonova]

If you have been active victim of such a scam or ponzi scheme, you can challenge it in the court. You can also share that on this forum or other bitcoin related platforms with proof.  It would consume a lot of resources for the forum to mediate this. If the accused project is also breaking some forum rule, you can report it.

[Theb]

Nope. Bitcointalk does not have any kind of liability whatsover as they are not the ones providing the scams. Let us make this an easier example, We all know by now that Facebook is the number one Social Media site being used by a lot of people everyday in FB and through its messenger you will see a lot of scams happening from Facebook groups and  through its chatting service. But even though scams are openly happening to FB it doesn't make them liable for the user's losses as first of all the transaction only involves two parties which is the victim and the scammer, FB on the otherhand provides as means of communication for both, it doesn't even make their site as an accessory to the crime. Secondly it is in the user's discretion on transacting with another party online, FB does have the power to monitor everything but by doing so they will violate our privacy. The same can be said to BCT as they are simply not part of any liability.