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400,000 People, 5 Billion US Dollars! New Exposure of Ponzi Scheme Harvesting Methods

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400,000 people, $5 billion, Mercedes raffle.
This is not the annual event of any particular company, but the number of victims of IGOFX's Ponzi scheme, the amount of fraud, and the prizes for events the platform once hosted, which were revealed in 2017.
What is more surprising is that similar to IGOFX, such a wide range of financial fraud, such a large amount of fraud is not uncommon, the same year the exposure of Volcker and JJPTR, 2020 PTFX Puton and HIIFX this year. The amount of fraud and victims on each platform are numerous.

The history of Ponzi schemes

This has nothing to do with global population growth or inflation. Ponzi schemes have been characterized by large numbers of victims and large amounts of fraud since their inception.
The ponzi scheme came from an Italian named Charles Ponzi. In 1919, he took advantage of the chaos of the world economic system after World War I and the differences in exchange rates and policies between countries to formulate a very complicated investment plan, claiming that he could make money by buying certain postal bills in Europe and then selling them to the United States. In addition to his financial mystique, he dangled huge investment bait, claiming that all investments would earn a 40 per cent return within 90 days. Of course, just to make it more believable, the first investors all made a 40% return in 90 days.
In just one year, Ponzi's scheme defrauded 40, 000 people and netted them $15 million.
Madoff, who also drew in funds with monthly returns of 1 to 2 percent, faced up to $7 billion in redemptions from the subprime mortgage crisis that brought the biggest fraud in U.S. history to light.
Unlike a typical Ponzi scheme, which lasts only two or three years, Madoff's scheme lasted nearly 20 years and, of course, the amount of money swindled was much higher, as much as $50 billion.

A Ponzi scheme

Why are people still falling for Ponzi schemes after hundreds of years of notorious ponzi schemes being exposed? It starts with the ponzi scheme.
Method 1: high yield temptation
Hundreds of years ago, and hundreds of years from now, this is the hallmark of a Ponzi scheme. Ponzi claims a 30% return in 3 months, PTFX claims a static return of 10% to 30% per month, HIIFX claims a profit of 38,700 after investing 10,000rmb in 36 months... Due to such attractive investment returns, people who have no investment experience and do not understand the risk of investment are difficult not to be tempted.
In addition to high returns, fraudulent platforms will also hold various activities from time to time. The Mercedes raffle mentioned above is the previous activity held by IGOFX. PTFX has also carried out marketing to expand its influence by means of group travel and inviting stars to attend concerts.
Method 2: promotion reward, multi-layer commission
The change of history and the development of technology have also given ponzi schemes new changes. In order to get more people to join in, modern scams mostly adopt the form of multi-level promotion to earn commission, that is, to promote a person to join the scam, the promoter can get a certain income, and the promoted to develop other referral, the superior promoter can also get commission. Take IGOFX as an example, members entrust their funds to traders through IGOFX's system. 70% of the profits belong to investors, while traders take 20%, and the remaining 10% is paid to four levels of introducers. The higher the level, the higher the returns.
Under the incentive of multiple commissions, everyone involved in the scam will continue to pull in their friends and relatives to form a team so that they can earn multiple commissions. This is the main reason why each Ponzi scheme involves a large amount of money and a large number of people.
Method 3: false propaganda
Fraud platform will adopt different false propaganda methods in different periods. In the early days, they packaged their platforms for compliance. IGOFX marketed itself as a New Zealand derivatives company and said it was regulated by Vanuatu. PTFX, in addition to its Indonesian-regulated subsidiary, created a maze of false identities that made it difficult for participants to identify themselves.
In the development period, the propaganda of fraud platform mainly focuses on developing people. High profits, promotion commission, various prizes and tourism activities are all in this period.
By the late stage, when the fraud platform has enough "investors" and a large enough capital pool, the publicity is ready to run away. In order to limit investors' withdrawal of funds, they sought various excuses such as system failure and frozen payment system, and transferred their assets while reassuring investors.

Identification of a Ponzi scheme

Just as the more beautiful things in nature are the more dangerous; In financial investment, investment products that blindly advocate high profits without mentioning risks will not only suffer from low returns once problems occur, but the principal will not be guaranteed.
Therefore, investors investing in unfamiliar financial fields must assess the compliance of platforms in multiple ways, not just listen to one side of the platform, to see whether it is regulated and how the reputation of the financial forum is. Don't let platform gimmicks get in the way of priorities.
Be more wary of financial investments that promote commission for newcomers, because the essence of a Ponzi scheme is to "rob Peter to pay Paul, and use the funds of newcomers to give commissions to the initial entrants". Once there are no more newcomers, this model will collapse. And the fraud platform had planned to abscond with the money before, such as investors found and convinced that the other party is often empty.


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Short Comments

  • There are many scams, cheats and cunning, investors should be careful

  • Be judicious when choosing a broker

  • 中国有很多这类骗局,还好现在的打击力度在不断加大

  • Scammers have always been around and the Internet has made it easier for them.

  • The current Ponzi scheme is becoming more and more complicated, but it cannot be changed.

  • People who have been trading for a long time need to be vigilant at all times!

  • Not uncommon! Liars are changing tricks!


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