How to Avoid Ponzi Scheme in Crypto Investing

How to Avoid Ponzi Scheme in Crypto Investing

Ponzi scheme effect on digital trading
Charles Ponzi

What is Ponzi scheme?

What is the difference between a Ponzi and a pyramid scheme?

History of the Ponzi scheme

  • Scammers attract investors by promising extraordinary returns. For example, a Ponzi scheme scammer promises investors that any investment they make in the scheme will yield a return of 25 percent or more.
  • Scammers never invest in this scheme. They just take people’s money and try to persuade more people to take part in the project.
  • They receive more money by attracting new investors and use part of that money to pay 25% of the previous investors’ profits.
International reply Coupon

What are the hallmarks of a Ponzi scheme?

High efficiency with minimal loss or risk

Efficiency and macro profit

Unregistered investments

Unauthorized sellers

Secret and sophisticated strategies

How to recognize the Ponzi scheme in digital currencies?

  • Scam Ponzi schemes in digital currency attract investors to these schemes with the promise of big profits and high income.
  • They often promise a guaranteed return on investor funds. Keep in mind that return on investment is never guaranteed and there is always the risk of losing some of your capital.
  • Invest well in the platform or system before investing, and do not invest if you do not understand how to do business properly.
  • Scammers of Ponzi schemes in digital currency try to pressure you to put more money back into the scheme because they need the money to pay other people’s interest.
  • Invest your assets only in reputable institutions that you have properly researched.
  • People usually get to know this plan through friends or family members who have made some money this way. Ponzi scams use these marketing tricks because it is much easier for people to trust their friends and family.

How to avoid Ponzi scams?

  • Investigate the person who introduced the plan to you, whether the person is from an organization such as the Stock Exchange or the Financial Industry Regulatory Authority, and whether or not he or she has a license to work.
  • Thoroughly research the risk involved in this investment.
  • Get acquainted with present-day techniques that came from Business, and ask for details about them.
  • Know the background, success rate, experience and skills and training of the company. Get the company’s annual report, audit and financial statements from them.
  • Get help from a trusted person such as a financial advisor, lawyer or accountant.
  • Read written information such as information about the company, officers and their financial records, investment documents and expenses, market value and existing markets.
  • Any guarantee or financial regulation regarding the repayment of funds must be recorded in writing.
  • Ask the person offering the investment questions about their experiences and education and what institutions they have worked with. Also, ask about other costs or benefits of investing and how to make payments.
  • Be as careful as possible. Also, search the internet for their backgrounds and investments in investing companies and learn more about them.

What is Ponzi like in digital currency trading?

In Conclusion



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store