What are the main signs to detect a pyramid scheme (Ponzi scheme)?

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Pyramid schemes, or Ponzi schemes, are a type of fraud where significant financial returns are promised in exchange for an initial investment and the recruitment of more customers or “investors”. The term “investor club” is sometimes used.


Those who organize these schemes are usually charismatic people who present you with a scheme where, in exchange for your investment and recruitment of other “investors”, you can multiply your money without much effort.


In reality, the “performance” or profit comes from the money of the people who join the system, which is used to pay those who entered the scheme previously. The main characteristics of a Ponzi scheme are as follows:


1. General rule in the world of investments: the safer an investment is, the less profit it will generate. Any investment that promises a high return involves risk. A proposal that projects the possibility of providing a high return in a safe and guaranteed manner is, at the very least, suspect;


2. Consistent Profits: no market remains linear. Investments can increase and decrease depending on different variables. Therefore, if an investment promises profits at all times, regardless of what the market indicates, you should be alert, as this could be an important indication that it is a Ponzi scheme or some type of scam;


3. There is no way to receive payments directly: Ponzi scams tend to present thousands of problems in withdrawing the money that is being “earned”, which is why they often insist that it be “reinvested” within their investment programs. All legitimate winnings must be available whenever you request;


4. There is no clarity about what is done with the money invested: if we do not know where the money or the supposed “investments” come from, then we must be careful. We cannot be carried away by supposedly innovative ideas that do not show us reality and that only seek to deceive us with pompous names and complicated investment concepts.


If you believe that someone is trying to run a scam or recruit you to participate in a potential Ponzi scheme, please contact Bitso immediately through our official channels: https://support.bitso.com/hc/en-us 

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