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Ponzi scheme involving a crypto exchange
09 Jan 2022 (753 views)  

My friend invested $1,000 in a crypto exchange. He receives $5 a day (perhaps in crypto currency) for 400 days. This gives him a 100% return (assuming that the value of the crypto currency remains stable).

He asked my view about this investment. He asked if it is safe for him wants to put  more money into the crypto exchange.

He also wanted to enroll me as an investor into this exchange. (He probably gets some benefit to enroll new customers).

I asked him to send me the contract specification. He was not able to access it. He suggested that I spend 10 minutes to listen to a presentation at the marketing office. 

I declined to waste my time to visit the office.

I told him that this is a typical ponzi scheme. This kind of investment scheme has appeared in various forms over the past few decades. 

The promoter uses the capital of the investors to pay the attractive return. So long as there are investors that put in more money than those who withdraw, the scheme will continue. During this time, the promoter will be taking out the excess capital.

When the ponzi stops growing, the promoter will disappear. 

Tan Kin Lian


Ponzi scheme involving a crypto exchange
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My friend invested $1,000 in a crypto exchange. He receives $5 a day (perhaps in crypto currency) for 400 days. This gives him a 100% return (assuming that the value of the crypto currency remains stable).

He asked my view about this investment. He asked if it is safe for him wants to put  more money into the crypto exchange.

He also wanted to enroll me as an investor into this exchange. (He probably gets some benefit to enroll new customers).

I asked him to send me the contract specification. He was not able to access it. He suggested that I spend 10 minutes to listen to a presentation at the marketing office. 

I declined to waste my time to visit the office.

I told him that this is a typical ponzi scheme. This kind of investment scheme has appeared in various forms over the past few decades. 

The promoter uses the capital of the investors to pay the attractive return. So long as there are investors that put in more money than those who withdraw, the scheme will continue. During this time, the promoter will be taking out the excess capital.

When the ponzi stops growing, the promoter will disappear. 

Tan Kin Lian