Ponzi schemes appeared in the early 1920s, although they cannot be completely certain that such patterns did not exist before that. It’s just that the scope of this pyramid model turned out to be so great that the scheme went down in history and became a brand.

It is noteworthy that about 100 years have passed since that time, and these plans are still popular and work smoothly.

In investing, these plans are also widely represented. Basically, they are a form of scam that attracts investors and pays the fund’s initial investors returns from investors who come later.

This plan makes people believe that profits come from the sale of products or other funds, and they don’t know that other investors are the source of the fund.

A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors bring in new funds and until most investors claim a full refund and remain confident in non-existent property they claim to own.
These schemes are relatively easy to spot. As for the naming, they use vague words like ” hedge futures contract trading” or “invest abroad” to describe their earnings strategy.
Some Ponzi schemes are hiding the terms of the High Yield Investment Program. To distinguish a real program from a fraudulent program, you need to carefully monitor the reviews and related websites. They hide very well, so if you have some doubts it is better to avoid that program when deciding to invest.

Typically, Ponzi schemes require an initial investment and promise above-average returns. Moderators often take advantage of investors’ lack of knowledge or competence, or sometimes claim to be using their own secret investment strategy to avoid providing information about the scheme.

Initially, program owners pay high returns to attract investors and incentivize existing investors to put in more money.

As others start to invest, the stratification effect begins. The Ponzi pays the initial investors “return” based on the investment of the new entrants, not the actual profit. Usually, the high returns obtained so quickly motivate investors to keep their funds in the scheme, so that Ponzi holders actually don’t have to pay investors much.

They only submit reports showing how much the program has earned, which supports the misconception that the program is a high-return investment. Ponzi scheme investors may even have difficulty getting money out of an investment.

Demo runners try to keep withdrawals to a minimum by offering investors new plans where withdrawals cannot be made for a certain period of time in exchange for higher profits. A Ponzi scheme operator noticed new inflows when investors were unable to transfer funds. If some investors want to withdraw their funds under favorable conditions, their request is usually processed immediately, giving all other investors the illusion that the fund is solvency and stable. financially.

It is not surprising that even experienced investors sometimes fall into the Ponzi scheme. If you are interested in High Yield Investment Programs, the risk increases significantly.

Here is a list of red flags that you need to keep an eye on. Even one of the flags can serve as a signal to withdraw money from the program.
Signs that identify a Ponzi

Warning signs include:

  •  A promise of high return on investment with little or no risk. Every investment carries a certain degree of risk, and investments that offer higher returns are generally riskier. Any “guaranteed” investment opportunity is generally considered questionable.
  • Unregistered investments. Ponzi schemes often include investments that are not legally registered. Registration is important because it gives investors access to key information about a company’s management, products, services, and finances.
  •  Vendors are not licensed. Laws in many countries require investment professionals and their companies to be licensed or registered. Most Ponzi schemes involve unlicensed individuals or unregistered companies, with a few exceptions. All in all, handing over your money to an unregistered company even sounds shady – it’s a serious sign.
  • The volatility is too stable. The value of investments tends to rise and fall over time, especially those with high returns. Investments that continue to generate consistently positive returns regardless of overall market conditions are considered questionable.
  • Investments cannot be understood or provide complete information. In fact, you don’t know where to invest your money, or how to watch the market. You just pay and wait for the wealth to fall on your head. That definitely won’t work.
  • Paperwork issues. The reasons given were why the client could not view the written investment information. Additionally, errors and inconsistencies in account statements are often a sign that funds are not being invested as promised.
  • Difficult to accept payment. Client does not receive payment or has difficulty withdrawing investment. Ponzi organizers often incentivize participants to “transfer” their investments and sometimes promise even higher returns on the transfer amount.

If you consider yourself a high-risk investor and still want to try high-return programs, carefully watch for these signs. When some of them start to grow, try to withdraw your investments as soon as possible. Ponzi scams will exist all the time, and it is every investor’s duty to know about them and avoid them.

Author: idolmeta.net



About Idol Meta

Check Also

What is Binance Launchpad ?

What is Binance Launchpad ? Binance Launchpad is a token launch platform that allows users …

Leave a Reply

Your email address will not be published.