Ponzi-Scheme

Last Updated on 20. March 2023 by Martin Schuster

Investors are promised investments with high returns. However, the advertised investment model does not exist. Only the deposits of later investors are used to pay returns of earlier investors. Often investors are then tempted to invest their returns again, with reference to the previous success. This in turn delays the payout. In contrast to the founders, however, the investors will never see their money again. The system collapses from the point when no new investors are found.

An example is the alleged Bitcoin trading and investment company Control-Finance by founder Benjamin Reynolds. He had received and embezzled at least 22,858,822 Bitcoin in 2019.