Ponzi Schemes Thanks To Bitcoin & Google
This is an opinion article, written by website owner Daichi Hoang based on information freely available online.
In this piece I discuss the the revival of the great online ponzi scheme thanks to Bitcoin and Google.
Charles Ponzi would be proud. But even he, the inventor of the scam could not have anticipated that almost a century on from his days in Boston that the Ponzi scheme would be thriving online, collectively stealing most likely hundreds of times more than the $8 million he managed to collect in 7 months.
With the recent exposure across all mainstream media for Bitcoin and other cryptocurrencies, user interest is at an all time high. A look at Google Trends shows that interest in December 2017 is 10 times the amount of what it was in March 2017 and 100 times more than the early days of 2012.
I wish I had Bitcoins. It's not every day, month, year or perhaps century that you see an uptrend like this. However whilst I wish the best of luck to everyone that already holds Bitcoins or is about to invest in them, I am seeing an alarming revival for the time tested Ponzi scheme, waiting to lure in unsuspecting everyday investors with the usual promises of outrageous returns.
So what is it about Ponzi schemes based on cryptocurrency that make it a bigger, badder breed of scam? For one, privacy which is one of the merits of cryptocurrency that is so highly touted work against the user in a ponzi scheme because you will never know where you are sending your money and once your money inevitably disappears, you have no governing body to assist you in reclaiming your lost funds. Sure, it happens with normal currencies that get fished by Nigerian scammers but at least you have some glimmer of hope of a traceable trail. Or that at least your bank will listen and maybe assist you. With cryptocurrency you have nothing and you're on your own.
The other dangerous aspect about crypto Ponzi schemes is that they are highly believable due to the current surge in value for Bitcoin and other cryptocurrencies. Bitcoin is up some 1600% over a year, so why wouldn't you believe that a fund with a genius trader or an automated trading system based on "years of testing" could return 700% in 45 days?
Of course you shouldn't believe it and the end result is always the same. The fund pays out in the early days to keep investors believing, then falls over once the incoming funds can't keep up with the payouts.
Most of us are smart enough to avoid anything that sounds too good to be true. I can accept that there will always be a minority of people that end up caught but what I can not accept is Google allowing these Ponzi websites to advertise on their platforms.
I've written about this in a previous article about an investment fund I2 Investments that I marked down as a fraud and it went bust shortly after. Google were allowing them to bid on investment fund related keywords and also allowing banner advertising on their display network.
With the crypto Ponzi, once again I have seen display ads and search ads being approved and displayed.
For obvious reasons I am not going to name the Ponzi but here's one of their Google ads:
2.6% daily! Have you invested your life savings yet and if not why not?
What, 2.6% daily isn't enough for you? You drive a hard bargain, sir. Ok just for you and my special customers, how about this one?
To clarify, I have nothing against Bitcoin. It's going through a boom and as long as there are people lining up to join the queue, it will keep going. But I believe that Google have a duty of care to ensure that their users aren't being exposed to dangerous scams.