Investors needed for the pyramids' funding.
In the world of finance, it's essential to navigate with caution. Two recent trends have emerged that demand extra vigilance: Ponzi schemes and forex trading, often intertwined with cryptocurrencies.
Ponzi schemes, named after Charles Ponzi, have evolved in the digital age. They now use their own cryptocurrencies to attract funds, allowing organisers to manage liquidity and create artificial price increases and decreases. The life span of these schemes is relatively short, attracting an audience and the necessary volume of funds within 2-4 months before ceasing operations.
Modern Ponzi schemes often lure investors with promises of returns on their investments. However, it's important to note that the return of investors' money, along with "earned" percentages, is only possible through the influx of new funds in a Ponzi scheme. This is a red flag that the returns are not based on legitimate business activities but on the continuous recruitment of new investors.
Forex trading, on the other hand, presents its own set of risks. Novice players are often offered miracle robots, copy trading strategies, and managed accounts, but statistics show that 95-98% of forex clients lose their funds completely or almost completely. One of the risks associated with forex trading is the use of leverage, which can be as high as 100x or more. Such high leverage can lead to quick losses due to a 1% movement in the opposite direction of a player's position.
The structure of the forex business is designed to siphon clients' money into their own accounts. Disputes with forex entities are often advised to be settled in the courts of offshore islands, as per the contract. This can make it difficult for investors to recover their losses.
In contrast, the use of cryptocurrencies itself is not illegal, but the number of companies using crypto assets and exhibiting signs of a financial pyramid, or engaging in illegal activity using crypto assets, is decreasing. Last year, 5,735 entities were added to the "blacklist" of "financial illegals," a 15.5% increase from 2022.
The number of detected financial pyramids last year increased by 46% to 2944. Many of these pyramids masquerade as "economic games" or attract investments in cryptocurrency, promising high returns.
However, not all is doom and gloom. At least four major Russian brokers hold a forex dealer license from the Bank of Russia, making them safer in terms of infrastructure risks. Achieving returns as promised by these schemes is possible, but not every month, and no one can guarantee it.
In conclusion, it's crucial for investors to be aware of the risks associated with Ponzi schemes, forex trading, and cryptocurrencies. Always do thorough research, be sceptical of high returns with little risk, and seek advice from financial advisors. Remember, if it seems too good to be true, it probably is.
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