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Ponzi
(Ponzi Scheme)
A Ponzi scheme is a fraudulent investment operation that pays returns to existing investors from funds contributed by new investors, rather than from profit earned. Named after Charles Ponzi who popularized it in the 1920s, these schemes collapse when new investments slow down.
Modern Ponzi schemes often disguise themselves as cryptocurrency investments (30% of 2022 crypto scams), forex trading, or real estate ventures. The SEC prosecutes about 60 Ponzi cases annually, with average losses of $120 million per scheme. Red flags include guaranteed high returns (e.g., "20% monthly"), complex strategies that avoid scrutiny, and difficulty withdrawing funds. Investors should verify all investments through the SEC and be wary of unsolicited offers.
Modern Ponzi schemes often disguise themselves as cryptocurrency investments (30% of 2022 crypto scams), forex trading, or real estate ventures. The SEC prosecutes about 60 Ponzi cases annually, with average losses of $120 million per scheme. Red flags include guaranteed high returns (e.g., "20% monthly"), complex strategies that avoid scrutiny, and difficulty withdrawing funds. Investors should verify all investments through the SEC and be wary of unsolicited offers.