loader image

What is a Ponzi scheme and how to recognize a Ponzi scheme?

How Bitcoin Supports Power Supply Stability Despite Greenpeace Criticism
مارس 26, 2023
Crime on the Dark Web
مارس 27, 2023

I was sitting and my phone rang. My friend sent me a message 10 years ago, and I happily opened it and saw that if you use the link I sent you to enter X company and invest, you will get 100% monthly profit guaranteed! I thought to myself, if he gives 100% guaranteed profit, why should he tell me!!


Due to Iran’s economic problems, fraud and pyramid schemes have increased recently. These plans mostly try to expand themselves with empty promises and using referral systems. For this reason, in this article, I tried to introduce and recognize Ponzi schemes, how to recognize them and the difference between pyramid and Ponzi schemes. I hope it is useful.


What is a Ponzi scheme?


Ponzi scheme or Ponzi scheme simply means that if some people give their money to the fraudulent person, they will face extraordinary profits. In these plans, the main priority is to subdivide and expand the network, which causes more people to be trapped in this swamp.


A real example of a Ponzi scheme


For example, 4 years ago (95) one of my friends invited me to an art company that supports the works of artists. The membership process was such that you had to pay a small amount (for example, one million tomans) to become a member, and after that you had to deposit an amount into the responsible account every month. In exchange for paying this money, very low-quality art paintings were offered, whose total amount was probably less than the membership fee of one person!


After a while, a small amount was added to their account to support the old members (in exchange for the sub-collection and inviting friends) so that they would become more enthusiastic about it. Then the new members paid the membership fees and the same procedure continued.


Until last year (98) it was announced that the mentioned company is a fraud and its leaders are wanted by FATA police.


In the meantime, people like my friend, while they had paid more than 20 million tomans, received 3 paintings and a total of 10 million tomans.


Where did the term Ponzi come from?


The name of the Ponzi scheme is taken from the name of Charles Ponzi, the most famous fraudster in history. Ponzi’s method was that he promised investors the doubling of capital in 100 days and paid the profits of old people using the capital of new members. As far as Wikipedia says:


He promised investors 50% profit in 45 days or 100% profit in 90 days by buying Post Office discount coupons and pledging them in America and other countries.


The attractive promise of Charles Ponzi was able to bring about 5 banks to the brink of bankruptcy, because the amount of bank profits is no longer attractive.


What is the difference between Ponzi scheme and pyramid scheme?


Ponzi and pyramid schemes both promise to become millionaires overnight and are always encouraging people to recruit new members.


Investors are usually targeted in Ponzi schemes. They are promised portfolio management and astronomical profits, but in pyramid schemes, the general public is encouraged to sub-collect and buy from the company.


Another important difference is that Ponzi schemes can not be sub-grouped, but pyramid schemes are based on sub-grouping.

Going viral on social networks


Some time ago, a program called Pai Network became very viral on social networks. The claim of this mobile mining software was without the need for special hardware. This network, which was very intelligently designed, had created a site with an anonymous wallpaper and had done such a good job of advertising on social networks that it has more than 1,000,000 active installations on Google Play alone.


How to recognize a Ponzi scheme?


It all comes down to how you meet. If you are introduced to a currency with the promise of becoming a millionaire overnight, you must know that it is a bowl under half a bowl. New startup projects usually have fixed characteristics:


White paper


In the white paper, a company tries to make its project performance transparent and mentions the goals and methods of project implementation. This white paper should be publicly available on the project’s official website.


Payment gateway


If you are on the side of an Iranian project, be sure to check the details of the portal before each payment. First of all, look for the electronic trust symbol. The owners of this symbol must get the approval of the Ministry of Industry and Mines, and this is a difficult task.


Then pay attention to the beginning of the port address to use HTTPS. Try to always use a dynamic second password to ensure the security of your password.


     Profile of the development team


The details of the creators and managers of the project should be clear and you can check the records of that person on social networks such as Twitter.

Some examples of famous Ponzi scams in Iran


Recently, there are bots that have become popular in Telegram that you can collect more points in exchange for introduction and sub-branching. It is claimed that with these points you can mine bitcoins virtually. In this process, you will be asked for a very small amount of Bitcoin for the miner’s expenses, and by paying that miner, you have actually become a victim of that Ponzi scheme.

iMiner, which is a fake company in Tehran, and according to the recent actions of the judiciary, the main office of this company has been sealed.

V Kingtron, which claims that it can give guaranteed monthly profit with artificial intelligence and algorithm, but even the identity of the owners of this site is not known.

The Unique Finance project, which recently stopped making profits completely and created a new token called UNQT.

Aitrades, which claims to give you a definite profit through digital currency exchanges, but in fact, the main game is played with money.

Project dAbelway, which claims to be an investment, attracts capital by using smart contracts.

     GCG ASIA Co


Recently, it was reported that this company in Iran is getting members on a large scale. The process is such that after the initial investment, when high amounts of around 1500 thousand dollars were received from the users, it is claimed that the return of investment will happen in four months!


That means an astronomical profit and many times the normal state. Some users report that this company was operating legally in Iran last year and had regular payments after the initial investment. However, after the Corona crisis, online payments have been suspended under false pretenses, and users’ funds have not been returned in this way. Unfortunately, due to the lack of transparency of the law, it is not possible to file a complaint or follow up from any institution.


genesis mining and bitmain farm sites and…


final word


Unfortunately, our country has vague laws regarding dealing with new technologies. For this reason, no legal center has yet received a license for digital currencies. Profit seekers use this space to catch fish from the muddy water. Although recently the Parliament and the government have talked about legalizing Bitcoin, but still the legal gap is strongly felt.


Before joining any group, site or faction, we should always weigh the aspects of caution and do sufficient research. If you are a victim of these systems, please share with us.