Scam alert

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For centuries, investors have been falling for crazy or “just too good to be true” investing schemes, systems and just bad investing ideas. With the current up-cycle in the market, these risky schemes and frauds just keep coming.

Bitcoin dominated the news lately. Bitcoin and other cryptocurrencies have been referred to as the first decentralized Ponzi scheme. However, both fans and naysayers are speaking out for and against cryptocurrency. For those riding the Bitcoin wave, be cautious and vet the investment program you are considering.

In the US, BTC Cloud Services Ltd. was sued by an investor in a $9.1 million lawsuit alleging that the company was running a virtual currency Ponzi scheme. Investors understood that BTC was providing bitcoin mining services, but the company never mined even a single bitcoin.

In China, authorities cracked down on 107 forms of knock-off altcoins in 2017, claiming they were Ponzi schemes in disguise. These include scams such as Five Elements Coin, Asia-Euro Coin, Onecoin and Ticcoin.

India’s Finance Ministry cautioned investors about the risks of trading in cryptocurrencies such as Bitcoin, saying that investments in digital currencies are like Ponzi schemes. The statement said “There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes.”

In South Korea, new regulations for cryptocurrency were proposed by the government in light of the rapidly increasing number of fraudulent cryptocurrency exchanges. Several fake exchanges were exposed including BitKRX, Bithumb, and Mining Max.

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