First-Hand telling of an online Ponzi: Eve Online's Currin Trading

[Vandroiy]

An RPG scammer explains how to run a Ponzi scheme, and how he used his experience to detect another. Thanks to people on IRC for digging this up.

http://web.archive.org/web/20091026234156/http://geocities.com/currintrading/
http://web.archive.org/web/20091021193732/http://geocities.com/currintrading/bank.html

Read it and weep. If you really read it, you will know why to weep.

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[unclescrooge]

So, which are the scam here in bitcoin world, and why?

[Vandroiy]

So, which are the scam here in bitcoin world, and why?

Just read it carefully enough. If this doesn't tell, I won't be able to do any better. Pay attention to the details, especially where he comments when his visible activities made no sense and how he avoided making that fact too obvious. Also his problem with the early whale; can you think of a way to prevent that?

All of it. A giant déjà vu, so massive that to not see it, you must want to not see it.

[unclescrooge]

So, which are the scam here in bitcoin world, and why?

Just read it carefully enough. If this doesn't tell, I won't be able to do any better. Pay attention to the details, especially where he comments when his visible activities made no sense and how he avoided making that fact too obvious. Also his problem with the early whale; can you think of a way to prevent that?

All of it. A giant déjà vu, so massive that to not see it, you must want to not see it.

Exactly. Do you know a lot of ponzy that stop new depositor and force withdrawal of unwanted one? That limits new depositors? Or announce one month ahead a lower of rates.

I read your links and that didn't looked like pirate's "thing".

I know pirate's rate are insane, but there's some things that are not ponzy like. Or that are some very clever tricks to make the scheme looks legit. I can't make my mind up actually :/

[EnergyVampire]

Interesting article, thanks for sharing.

I found this paragraph interesting:

" My phantom team became very useful to me. They were the perfect excuse and scapegoat for anything that did not go right or measure up to my clients' expectations. When people asked whether they could join Currin Trading (and there were many applicants), the decision always went to "the team". How did I end up on your mailing list? Ask the team. Would you do this or that for me? I'll talk it over with the team and get back to you. I want to help, and I certainly trust you, but ultimately it's up to the team. "

[westkybitcoins]

Anyone who won't say what they intend to invest your money in, and won't explain how they plan to make money from doing so, can't be trusted. That's the first hurdle they should have to jump, and if you're not even demanding THAT, you're just giving your money away.

We should all know this by now.

[DannyHamilton]

Read it and weep. If you really read it, you will know why to weep.

I read it all, start to finish.  It is an interesting, though typical, tale of how a ponzi scheme works.  Fortunately, I haven't "invested" any of my bitcoin with any scheme that offers potential returns without investigating and ensuring that I fully understand where the returns are coming from, as well as understanding what the strengths and risks are associated.  Therefore, I don't see any reason to weep.

[Vandroiy]

Exactly. Do you know a lot of ponzy that stop new depositor and force withdrawal of unwanted one? That limits new depositors? Or announce one month ahead a lower of rates.

Okay, let me help you. Remember the problem with "the Whale" in the beginning, and the operator trying to adjust to it? Imagine he had limited deposits from the start, to keep growth close to interest until he loosens it at the very end. It increases the running time and therefore the potential overall growth!

But it's not just that one. I want people to really grasp the concept; I doubt BS&T is the only place where coins will disappear in the near future.

I read it all, start to finish.  It is an interesting, though typical, tale of how a ponzi scheme works.  Fortunately, I haven't "invested" any of my bitcoin with any scheme that offers potential returns without investigating and ensuring that I fully understand where the returns are coming from, as well as understanding what the strengths and risks are associated.  Therefore, I don't see any reason to weep.

Well, true, but unfortunately we will probably feel the shake-up even if we're not directly hit. The HYIP mania has grown enough to at the very least give us more bad press.

[hazek]

What a magnificent read, thank you very much OP I really enjoyed it!

[unclescrooge]

Exactly. Do you know a lot of ponzy that stop new depositor and force withdrawal of unwanted one? That limits new depositors? Or announce one month ahead a lower of rates.

Okay, let me help you. Remember the problem with "the Whale" in the beginning, and the operator trying to adjust to it? Imagine he had limited deposits from the start, to keep growth close to interest until he loosens it at the very end. It increases the running time and therefore the potential overall growth!

But it's not just that one. I want people to really grasp the concept; I doubt BS&T is the only place where coins will disappear in the near future.

I read it all, start to finish.  It is an interesting, though typical, tale of how a ponzi scheme works.  Fortunately, I haven't "invested" any of my bitcoin with any scheme that offers potential returns without investigating and ensuring that I fully understand where the returns are coming from, as well as understanding what the strengths and risks are associated.  Therefore, I don't see any reason to weep.

Well, true, but unfortunately we will probably feel the shake-up even if we're not directly hit. The HYIP mania has grown enough to at the very least give us more bad press.

Thanks Vandroiy.
Actually I think the biggest problem (for those non invested in ponzy) is that it sucks the capital from other more legitimate (or transparent) business, who can't compete with the rate.

This is not a big problem for bitcoin future though, because of some of the project announced (like the bitcoincard) which will be real game changers.

But back to the ponzy subject

[Stephen Gornick]

An RPG scammer explains how to run a Ponzi scheme, and how he used his experience to detect another.

Wow,...
so I wanted to know how it went down, and read:

Cally knew his cover had been blown, so just before the bubble burst, Rast faked his own death to detract attention away from his scam, only to re-emerge, close the bank, withdraw the cash and gloat about his deception in a video confession and on the Eve Online forums.

Five years later (2011), it all happened again:

Over the course of just eight months, some 4,000 Eve Online players deposited around 1,831.67 billion ISK into the scheme, with the rest coming in from mounted interest and other ventures.

“Today is the day many expected to come. Today, the 12th of August 2011, is the day where it all comes together. Phaser Inc. is done, over, finished.

After a stunning period of eight months, we decided it’s enough.

No more new accounts. No more mails. No more payout days. No more ISK.

No more Phaser Inc.

Most likely, this will cause a lot of questions. The most important question will be answered right here, right now. The ISK is gone; you will not see it ever again. You’ve invested it, got a chance on some profit, but it turned out to be not the best choice you’ve ever made. That’s how investing works. At least, that’s how it went for the most of you.”

 - http://www.nowgamer.com/mmo-worlds/1401770/eve_onlines_greatest_moments_its_a_cruel_world_out_there.html

 - http://www.youtube.com/watch?v=b5I6GcV6jE8

The cash value of the entire haul?   About $50,000 USD worth.  

[hazek]

And all this fraud just because people are financially and economically illiterate. 

[hazek]

Theres not too many things that long that I can sit down and read all in one go, but that had me hooked.

Yeah the writing was indeed really good. I could read a whole book about it. There were numerous moments when I laughed out loud or made out loud comments to myself about how intelligent, sneaky, precise and thought out his strategies were.

[westkybitcoins]

And all this fraud just because people are financially and economically illiterate. 

I don't even know if those terms apply. It wasn't just them not knowing what questions to ask about the "investments." I mean, even scammers fell for them. It seems like such frauds simply cater to the greedy: if your greed overpowers your knowledge and diligence, then you get burned.

I also just now realized how much money these scams netted after Stephen's post above. Funny how the author of the article never once mentioned the USD/Euro/etc. value of what he stole. All the better to let himself sleep, I suppose.

[uuidman]

And all this fraud just because people are financially and economically illiterate. 

I don't even know if those terms apply. It wasn't just them not knowing what questions to ask about the "investments." I mean, even scammers fell for them. It seems like such frauds simply cater to the greedy: if your greed overpowers your knowledge and diligence, then you get burned.

I also just now realized how much money these scams netted after Stephen's post above. Funny how the author of the article never once mentioned the USD/Euro/etc. value of what he stole. All the better to let himself sleep, I suppose.

Though the isk would be worth several thousand American dollars 

This was the sum once mentioned, and yes a good read, thanks.

[BrightAnarchist]

Thanks for sharing this, it's a really entertaining read!

[nrd525]

Fascinating read.

[finkleshnorts]

And all this fraud just because people are financially and economically illiterate. 

I don't even know if those terms apply. It wasn't just them not knowing what questions to ask about the "investments." I mean, even scammers fell for them. It seems like such frauds simply cater to the greedy: if your greed overpowers your knowledge and diligence, then you get burned.

I also just now realized how much money these scams netted after Stephen's post above. Funny how the author of the article never once mentioned the USD/Euro/etc. value of what he stole. All the better to let himself sleep, I suppose.

Bingo. We are ALL susceptible to this.

[waltmarkers]

This is an interesting psychological discussion...but I don't see anything about BTC. Should this be moved to one of the general off topic boards? Or maybe just a pirate hating board? Can we make a special one of those?

[Jan]

Epic story, this is movie material