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Author Topic: Bryan Micon's List of BTC Ponzi Schemes that should not be listed as "Lending"  (Read 107911 times)
JoelKatz
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August 14, 2012, 10:54:50 PM
 #781

There's no legal framework for doing "claw-back" of bitcoins.
No special framework is needed. If there was a claw back, it would be based on the fair market value of the bitcoins fraudulently transferred as of the time they were transferred, likely with interest accumulating from that time. As far as the legal framework would be concerned, bitcoins would be treated like any other thing of value. Intangible items with a market value are routinely clawed back at fair market value. For example, stocks are clawed back.

The big question is whether the recipients could be identified and whether anyone is ever going to have enough information to even try to identify them.

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August 14, 2012, 11:09:46 PM
 #782

There's no legal framework for doing "claw-back" of bitcoins.
No special framework is needed. If there was a claw back, it would be based on the fair market value of the bitcoins fraudulently transferred as of the time they were transferred, likely with interest accumulating from that time.

so wait, this might just work.

accept 1 bitcoin "deposit" today with the price at $12.  the downlevel reinvests so it doesn't matter what the interest rate is, ... 5%, 7% whatever.

then this ends (collapse) four months from now.

so i'm busted as running a ponzi. because now my identity is known i face a clawback.  i owe the depositor $12 plus interest (let's say the best rate a bank offers for a cd is 3%).    so i have to refund $12.12 (the bitcoin which was worth $12 at the time i accepted it plus twelve cents of interest, based on the rate of 3% per year).

but the exchange rate is $15 by then. so I cash out 0.808 bitcoins (then worth $12.12) and keep 0.192 bitcoins for myself.

but if instead the exchange rate drops to $10 by then, i return the full 1.0 btc.  no harm, no foul.  no bitcoins were lost.

heads i win.  tails you lose.
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August 14, 2012, 11:29:36 PM
 #783

Oh shut up fascist. I have no problem with ponzi talks and whinnings, but don't drag the parasites that be into this, thanks.

their participation is required by law when securities fraud (which ponzis fall under) occurs.

here's a recent example where they went after a ponzi feeder fund "for their role in facilitating a massive ponzi scheme operated by another individual": http://investorswatchdog.com/blog/investorswatchblog/?p=9637


The big question is whether the recipients could be identified and whether anyone is ever going to have enough information to even try to identify them

i wonder if many of the "recipients" claiming interest received actually are recipients, or just shills.

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We tend to believe that people pretend to be someone else only in the movies. But it happens every day. A scam operator can afford to buy the temporary services of actors to play any role. If you’ve begun your search with a goal of confirming the legitimacy of the investment, the shills will convince you of it.

The trick to keeping safe on this dangerous investing landscape is changing what you look for in your investigation. If you look for legitimacy you’ll run into an endless line of shills. But, if you learn how to look for fraud, you’ll recognize it. After all, if fraud is what you want to avoid, why would you look for anything else?
http://investorswatchdog.com/blog/investorswatchblog/?p=9565
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August 14, 2012, 11:31:31 PM
 #784


heads i win.  tails you lose.


There is also the small matter of federal prison.

*processing payment* *error 404 : funds not found*
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August 14, 2012, 11:34:30 PM
 #785

i wonder if many of the "recipients" claiming interest received actually are recipients, or just shills.

Well I dont think there is enough tinfoil to build a hat for that conspiracy notion. Do you really think that every single person posting on this forum who invested something in BTCST is a shill, please find just one post where someone who invested claims they havnt received interest etc etc etc.



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August 15, 2012, 01:13:59 AM
 #786

Anybody got a street address for Pirate the Midland, Texas check-bouncer?

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August 15, 2012, 01:26:52 AM
 #787

1)  For those that haven't seen it yet, most ponzi threads are now categorized as "Long-term offers" which obviously is not the correct category name, but at least there is a little corner for these scams to sit in now:  https://bitcointalk.org/index.php?board=88.0   I think a name like "1000%+ APR Investments" would correctly categorize them and is a huge warning bell to anyone with a sound understanding of economics.

2)  That being said, here is the locked BCST thread:  https://bitcointalk.org/index.php?topic=50822.1480 still erroneously in "securities"   - I have seen many other scams in various other forums but it's good to see that at least a clean up has started and mods are taking action.

3)  The direct communication with Pirate is interesting.  If anyone wants to PM me conversations I would love to read them and will keep both your identity and the content confidential.  If anyone out there involved in this scam in any way wants to communicate anonymously or privately with me I welcome it.  Send anything you feel may be of help.

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August 15, 2012, 01:28:28 AM
 #788

i wonder if many of the "recipients" claiming interest received actually are recipients, or just shills.

Well I dont think there is enough tinfoil to build a hat for that conspiracy notion. Do you really think that every single person posting on this forum who invested something in BTCST is a shill, please find just one post where someone who invested claims they havnt received interest etc etc etc.




I also believe there to be many shill accounts reporting interest as paid.  Of course there are many real marks too, the BTC has to come from somewhere.  a few real interest payments + a few shills = the appearance of community support

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August 15, 2012, 03:25:29 AM
 #789

i wonder if many of the "recipients" claiming interest received actually are recipients, or just shills.

Well I dont think there is enough tinfoil to build a hat for that conspiracy notion. Do you really think that every single person posting on this forum who invested something in BTCST is a shill, please find just one post where someone who invested claims they havnt received interest etc etc etc.

Given the rate of whinging on the GPUMax thread about not getting _work_, I would imagine that there would be a hue and cry if people didn't get their payments.

or complaining about being on the waiting list too long..

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August 15, 2012, 03:27:52 AM
 #790

On the contrary, when it comes to Ponzis, a lack of evidence of anything is evidence of a Ponzi. It's also extremely easy to disprove if it's not a ponzi. As it is, there is no evidence that a business side of BS&T even exists. If I'm wrong about this, let me know.
Well, there are quite a few respected members of this very forum, that know exactly about the BS&T business. You being a Moderator, did you even think about asking them privately before making your ponzi accusations?
Of course, both as a public call for information, and as private requests. I finally have a lead, so I'm going to see where that brings us.
Now it might well be a ponzi, but the last two months led me to think it's not. The "ponzi campaign" seemed to work quite well, the withdrawal must have been large, according to GLBSE PPT rates and forum talks, yet he has been able to meet his obligations.
That's a common misconception. The "ponzi campaign" did work well... for Pirate. Sure, a vocal minority withdrew a large chuck of money, but what you aren't seeing behind the scenes is that the "ponzi campaign" actually brought Pirate significantly more money. He was receiving close to 10% in deposits per week, even after you subtract the withdrawals. Of course he was able to meet those obligations, knowing that.

Hey, you Pirate supporters, could you point me to ONE case in history where someone has paid consistently several thousand percent REAL interest rate for an unlimited number of debtors over extended time where the nature of the business was not disclosed to investors that didn't turn out to be a scam.

The extended time you speak of is right at a year and its in a brand new/emerging technology.  Look at any brand new, rapidly growing company and their rates will be off the charts and of course if you extrapolate those rates to infinite they look ridiculous. That's part of the point that the 'pirate supporters' are trying to make.. a high interest rate isn't a clear indicator all by itself.
So, your argument boils down to "because Bitcoin". I'm afraid that you'll have to back that statement up then. What is special about Bitcoin that allows Pirate to provide such large returns at this scale?

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August 15, 2012, 03:29:41 AM
 #791

i wonder if many of the "recipients" claiming interest received actually are recipients, or just shills.

Well I dont think there is enough tinfoil to build a hat for that conspiracy notion. Do you really think that every single person posting on this forum who invested something in BTCST is a shill, please find just one post where someone who invested claims they havnt received interest etc etc etc.




I also believe there to be many shill accounts reporting interest as paid.  Of course there are many real marks too, the BTC has to come from somewhere.  a few real interest payments + a few shills = the appearance of community support

So the speculation is only valid if part of your fantasy ? You sure as hell need to watch different porn.

Now back to reality, if there is no person complaining about not receiving interest then there is only 2 possibilities at this moment: 1.) There is no marks/investors other than the shills, 2.) There is real investors and none of this shill bullshit and these real investors have gotten paid every single week thus no complaints.

Can you step into reality for a moment, I know its asking alot from your pokemon fights.

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August 15, 2012, 03:32:37 AM
 #792

So, your argument boils down to "because Bitcoin". I'm afraid that you'll have to back that statement up then. What is special about Bitcoin that allows Pirate to provide such large returns at this scale?

Im only going to answer this part. Thats exactly why he isnt sharing, I have had some of my very own short term legit lucrative ideas that I never revealed which later on got caught up by other people. You are effectively requesting what he is doing to make money, surely you cant be this naive to think that if its all legit and not a ponzi like Lord Micon and co. wants it to be then not revealing the actual business is +EV for pirate ?

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August 15, 2012, 03:41:44 AM
 #793

So, your argument boils down to "because Bitcoin". I'm afraid that you'll have to back that statement up then. What is special about Bitcoin that allows Pirate to provide such large returns at this scale?

Im only going to answer this part. Thats exactly why he isnt sharing, I have had some of my very own short term legit lucrative ideas that I never revealed which later on got caught up by other people. You are effectively requesting what he is doing to make money, surely you cant be this naive to think that if its all legit and not a ponzi like Lord Micon and co. wants it to be then not revealing the actual business is +EV for pirate ?

I agree with this.  I gave you a lead with the futures thing, someone said it was a 0 sum gain, (which technically, any business is.. you can't just make new money, only the fed does that) and that was countered explaining how its not and then basically people forgot about it.  If you really want to know, then talk to some economists and/or traders and work through the possibilities.  Ignore most of the people here for that, because they're just the internet and have too much riding on being "right" vs being accurate.

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August 15, 2012, 04:04:20 AM
 #794

So, your argument boils down to "because Bitcoin". I'm afraid that you'll have to back that statement up then. What is special about Bitcoin that allows Pirate to provide such large returns at this scale?

Im only going to answer this part. Thats exactly why he isnt sharing, I have had some of my very own short term legit lucrative ideas that I never revealed which later on got caught up by other people. You are effectively requesting what he is doing to make money, surely you cant be this naive to think that if its all legit and not a ponzi like Lord Micon and co. wants it to be then not revealing the actual business is +EV for pirate ?

I agree with this.  I gave you a lead with the futures thing, someone said it was a 0 sum gain, (which technically, any business is.. you can't just make new money, only the fed does that) and that was countered explaining how its not and then basically people forgot about it.  If you really want to know, then talk to some economists and/or traders and work through the possibilities.  Ignore most of the people here for that, because they're just the internet and have too much riding on being "right" vs being accurate.
Thank you for that, by the way. I am currently following up on this lead to see where it goes.

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August 15, 2012, 04:30:14 AM
 #795

Explain again how futures trading is not zero sum?  Who is losing 50kBTC/week to pirate?  Does anyone really think a bunch of rich people buy high and sell low EVERY WEEK just for teh lulz?

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August 15, 2012, 06:57:48 AM
 #796

I have done so, and have not been impressed at all with the responses that I've gotten. They mostly consist of the same type of implausible explanations made in public. If anyone reading this wishes to claidim such special knowledge, you are welcome to send me a private message.

To date, nobody has been able to explain what these things are doing in a way that meets three criteria:

1) It doesn't require some people who invest to prosper at the expense of others who invest in the same enterprise.

2) It doesn't rely on something phenomenally implausible to be the case.

3) It doesn't have at its root some significant misunderstanding of how things work.

It's the same nonsense: arbitrage (fails 2), mining (fails 2 and 3), market manipulation (fails 3), unlimited supply of people willing to pay *way* too much for BTC (fails 2 and 3), perpetual growth (fails 1 and 3), multiple independent ventures that cancel out each other's weaknesses (fails 2 and 3).
Quoting this to bring it back to the front page.
I would love to hear an explanation that covers this without 1-3.

As much as I respect Joel regarding other areas, here he's making a claim that's the equivalent of saying Goldman Sachs and JP Morgan shouldn't have been able to work. Numerous proposals have been put forth, a number of which are not just plausible, but have had successful implementations in traditional finance (though perhaps not legal). There have also been a few instances where traditional financial regulation has been projected onto Bitcoin's unregulated environment even though no such authority exists and may not even be capable of enforcing decisions.

In addition, to my knowledge he has not refuted any of the examples offered with any kind of explanation beyond the three items above. Claiming "implausibility" and "significant misunderstanding" is as helpful as the statements that 7% returns are factual evidence of Ponzi practices; implausibility is subjective, and misunderstandings can be dependent upon which school of economic though you adhere to.

I also don't know of any links that have been provided to relevant information on this matter. At this point, I could fire back the exact same accusations of implausibility and significant misunderstandings on his part about finance. Joel, any clarification or information would be greatly appreciated.

I'll say this regarding item #1:

Gains can be had by all, but some gains may be greater than others. Steady appreciation in value allows for this.

Example:

  • We both buy BTC1 @ $5
  • I sell at $6
  • I buy again at $7
  • I sell at $8
  • I buy again at $9
  • I sell at $10
  • I buy back at $11
  • We both sell at $12

The end result is that we've both gained, but because I was hopping in and out (whether trading, mining, running a business, etc), my gain due to BTC appreciation is only $4 whereas yours would be $7.

That dynamic flow is where the gains are made - the overall gains are made at the expense of the USD, as wealth represented by the dollar is transferred into Bitcoin. Read FOFOA's It's the Flow, Stupid post for a more in-depth discussion on this in terms of oil value flowing into the USD.

and the last thing we need is to replace government oversight by some Micon/JoelKatz oversight.
Well, that's where you're wrong. *Precisely* what we need to do is replace government oversight with private oversight. Did you see the government doing anything about Madoff? They were practically a co-conspirator. It was private individuals who noticed how perfectly Madoff fit the profile of a Ponzi scheme who sounded the alarm.

Yes. At the same time, I'm concerned about Micon's sham of investigative journalism hawking conclusive evidence when it's based on conjecture and opinion. No evidence other than pattern similarities have been presented, and the emotional fervor has completely discredited any semblance of professionalism.

The likes of znort987 and organofcorti would be more appropriate for this analysis IMO.

It's an entirely different thing to invest in SHARES of a company. That might actually generate astronomical revenue, if you're very lucky.

Holding shares for capital appreciation arrives at the same end point as receiving full payments on profit for the same duration.

Example:

1 share valued at $1 rises to $100.

or

1 share valued at $1 generating simple interest payments of 10% for about 84 periods (or totaling the same duration the capital appreciation took to achieve $100).

You still have the same amount deposited either way. The former makes sense when an asset is undervalued, while interest payments usually make sense when asset valuation and capital flow are stable. We're used to seeing established firms paying a dividend based on profit from a fully-realized operation. Receiving payments on profit during growth is a completely foreign concept to the majority of investors today.

No special framework is needed. If there was a claw back, it would be based on the fair market value of the bitcoins fraudulently transferred as of the time they were transferred, likely with interest accumulating from that time. As far as the legal framework would be concerned, bitcoins would be treated like any other thing of value. Intangible items with a market value are routinely clawed back at fair market value. For example, stocks are clawed back.

The big question is whether the recipients could be identified and whether anyone is ever going to have enough information to even try to identify them.

There is still no legal precedent regarding Bitcoin in the first place. Nothing guarantees they'll be treated as existing intangible items are. And would the funds clawed back be in USD? Will that be done through liquidation of BTC? Even if all of the individuals could be identified, if they're distributed across jurisdictional borders, how would that reverse anything without being able to retrieve the bitcoins that have been sent? Would those targeted be subject to remuneration of the entirety, being in excess of their own participation? How would off-blockchain exchanges be handled?

This is a legal and regulatory nightmare that is not confined to a single system of law. Bitcoin is not explicitly subject to any law as of yet, and its very nature defies traditional structures to begin with.

Thank you for that, by the way. I am currently following up on this lead to see where it goes.

Looking forward to actual proof, one way or the other.
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August 15, 2012, 07:27:32 AM
 #797

1)  Anyone thinks they can make a reasonable, block-chain backed guess as to actual BTC interest paid each week?  Certainly Pirate is doing the Ponzi basics to keep weekly payouts low, but anyone can give the last ~ 4 weeks or so?  see the progression?  taking the interest numbers and extrapolating can show when the boom is most likely.

2)  Clipse it's clear this thread upsets you, but please try and keep personal insults out of it, it detracts from discussion.  I am guilty of this too from time to time.  BurtW is a good example of someone arguing your side of this debate, but doing so in a respectful manner.  Granted I think what he is doing is extremely wrong, but at least he is a gentleman in his responses.


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August 15, 2012, 07:46:21 AM
 #798

I'll say this regarding item #1:

Gains can be had by all, but some gains may be greater than others. Steady appreciation in value allows for this.
I think you didn't understand what I was saying. I didn't say every claim violated every item. In fact, I specifically listed some claims that are fine by item 1 but busted by the others.

Quote
No evidence other than pattern similarities have been presented, and the emotional fervor has completely discredited any semblance of professionalism.
Pattern similarities are extremely strong evidence. If someone behaves just like Madoff or Stock Generation, that very strongly suggests that they're doing the same thing, right? This is especially strong, almost conclusive, when no alternative has been suggested or can even be imagined.  As for "emotional fervor", I think it's not coming across clearly that this is intellectual fervor, not emotional.

Quote
There is still no legal precedent regarding Bitcoin in the first place. Nothing guarantees they'll be treated as existing intangible items are. And would the funds clawed back be in USD? Will that be done through liquidation of BTC? Even if all of the individuals could be identified, if they're distributed across jurisdictional borders, how would that reverse anything without being able to retrieve the bitcoins that have been sent? Would those targeted be subject to remuneration of the entirety, being in excess of their own participation? How would off-blockchain exchanges be handled?
It's an intangible thing of value. No complex considerations are really involved. They'd be treated as something of value, with a fair market value established as of the time they were transferred. I guess we'll find out for sure if any of the current cases involving theft of Bitcoins proceeds.

Yes, it's possible courts might do something really strange. But it's very, very likely they'll treat this the same as stocks or any other thing whose value can be established at the time it was transferred.

I should point out that greed for ill gotten gains is one of the things scammers have been exploiting for centuries. To some extent, if you want to be the beneficiary of fraudulent transfers of other people's money, you deserve to be scammed.

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August 15, 2012, 08:53:10 AM
 #799

Interested in the picture.  When Pirate defaults will u tell me which one?

this is in it's final week or 2.

the mess will be fun to watch, it's like a train wreck in slow motion / can't look away but at same time feel bad for those in the wreck.  

Duality of man sir.

It's been two weeks since July 31.

Quoting this to bring it back to the front page.
I would love to hear an explanation that covers this without 1-3.

As much as I respect Joel regarding other areas...

...

I'll say this regarding item #1:

Gains can be had by all, but some gains may be greater than others. Steady appreciation in value allows for this.


I think you didn't understand what I was saying. I didn't say every claim violated every item. In fact, I specifically listed some claims that are fine by item 1 but busted by the others.

I understood; the point about item #1 was in response to Shadow383.

Pattern similarities are extremely strong evidence. If someone behaves just like Madoff or Stock Generation, that very strongly suggests that they're doing the same thing, right? This is especially strong, almost conclusive, when no alternative has been suggested or can even be imagined.  As for "emotional fervor", I think it's not coming across clearly that this is intellectual fervor, not emotional.

I agree, patterns are good indications. Alone, that's still insufficient to act as proof, especially in the context of Bitcoin - if there were correlated blockchain records or almost anything more substantive than pattern similarities, the situation could be different. There would be no one more thrilled to see incontrovertible data than me, whether for or against BTCS&T.

Acceptance of the alternatives is dependent on individual ability to see how they work; several years ago, I'd have called it a scam as well. I would appreciate more information explaining how they cannot work according to your points #2 and #3 - those reasons were highly subjective.

The emotional fervor statement was attributed primarily to Micon.

It's an intangible thing of value. No complex considerations are really involved. They'd be treated as something of value, with a fair market value established as of the time they were transferred. I guess we'll find out for sure if any of the current cases involving theft of Bitcoins proceeds.

Yes, it's possible courts might do something really strange. But it's very, very likely they'll treat this the same as stocks or any other thing whose value can be established at the time it was transferred.

I tend to agree in that regard, at least for western courts. Enforcement seems likely to prove a much stickier concern, and that's where no amount of legislation aimed at Bitcoin itself can help. Even with traditional offshore tax havens, there are ways to gain access to assets. Bitcoin makes that much more difficult.

If the wealth in Bitcoin assets cannot be retrieved, dollar-based remuneration would have to come from somewhere else. That means probable depreciation against Bitcoin as well as reinforcement of safe haven status for the system - a catch-22. If just a part of the targeted asset is retained by the accused, legal authority is eroded.

Incapacitation of an individual without subsequent access to the Bitcoin holdings would have the same result of making the system stronger at the expense of fiat regimes, maybe not so much today but as the billion dollar market size is exceeded it may become more costly to claw back than to let it lie. By that point, the community may have developed a reasonable solution on its own.
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August 15, 2012, 10:05:19 AM
 #800

this is in it's final week or 2.

the mess will be fun to watch, it's like a train wreck in slow motion / can't look away but at same time feel bad for those in the wreck.

It's been two weeks since July 31.

Micon has underestimated the extent to which greed can overpower sense. Not sure if that speaks for or against him. He thought some people were better, i.e. less greedy and more intelligent, than they actually turned out to be.

So what's a better estimate? We know that a Ponzi scheme can, in theory, go on forever, as long as people believe in it. However, in this particular case there are good reasons for a relatively short remaining time, particularly the extremely high interest rate and the resulting exponential growth.

Assuming that a certain fraction of "investors" withdraws some part of their paper gain, at first sight this part also grows exponentially, which will break the Ponzi scheme at some time. However, the steep exponential curve works against the pirate in two additional ways that may well make withdrawals grow more steeply than this assumption:

1. As the perceived wealth of some early "investors" grows way beyond their initial investment, they are increasingly tempted to withdraw a part of it, because they figure that the rest will soon make up for the withdrawal. BullShit Trust is now trying to counteract that by lowering the interest rate to discourage exactly this effect and make people leave everything in for longer.

2. As the figure grows, people may get suspicious and begin to ask themselves where all that money comes from. Some may withdraw when they realize that early withdrawal is their only chance to keep their money.

Still, as long as people believe in a Ponzi scheme, it can, in theory, go on forever. On the other hand, if just one person withdraws a larger amount, the pirate will shut down to avoid that payment. This can happen any day now, but if it doesn't, then the growing sum of smaller withdrawals will eat away on the pirate's stash until it becomes unbearable for him to see his heap shrink.

He may be able to keep going for a couple of weeks. With a lot of luck he may keep going for a few months. If something happens that brings in a load of new "investors", he may be able to go on for even longer, but that seems unlikely, as the potential newbies are probably all here in the forums already and should have made their decision.

Also, the discussions here, in which the BullShit Trust supporters look increasingly isolated, stupid, devoid of believable arguments for their case, and are increasingly recognized as greedy accomplices, may convince "investors" to withdraw and thus bring down the Ponzi scheme.
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