News Detail

Overview of the Scam

An Investment Ponzi Scheme is a type of fraud where returns are paid to existing investors from funds contributed by new investors, rather than from profit earned. This scheme relies heavily on social engineering tactics to lure victims into investing.

Timeline (When it happened)

Ponzi schemes have been around for centuries, but one of the most notable cases is that of Bernie Madoff, who was arrested in 2008 for running a $65 billion Ponzi scheme. However, these scams continue to happen to this day, with new cases emerging every year.

Root Cause / How it Worked

Ponzi schemes work by promising unusually high returns or dividends to investors, which are actually paid from the investments of subsequent investors. The scheme relies on the constant influx of new investors to provide returns to earlier investors, rather than generating revenue through legitimate investments.

Impact on Victims

Victims of Ponzi schemes often lose their entire investment, and in some cases, their life savings. The emotional and financial impact can be devastating, and it may take years for victims to recover from the loss.

Red Flags & How to Avoid

To avoid falling victim to a Ponzi scheme, be cautious of investments that promise:

• Unusually high returns with little to no risk
• Consistent returns, regardless of market conditions
• Pressure to invest quickly, without allowing time for research
• Lack of transparency about the investment or the company

Tips for Protection

To protect yourself from Ponzi schemes and other investment scams, follow these steps:

• Research the investment and the company thoroughly
• Verify the company's registration and licenses
• Be cautious of unsolicited investment offers
• Monitor your investments regularly and report any suspicious activity

If you think technology can solve your security problems, then you don’t understand the problems and you don’t understand the technology.