Sunday, June 10, 2018

Are Ponzi Schemes Going Crypto?

In 2016 investors lost over $2 billion in 59 Ponzi schemes. That's just in the U.S. Opportunities to lose a fortune are global.

And now a new world of money-losing opportunities confronts incautious investors online. "Hundreds of technology firms raising money in the fevered market for cryptocurrencies are using deceptive or even fraudulent tactics to lure investors," The Wall Street Journal warns.

For helpful background, see "Cryptocurrencies and Online Marketing: Legitimate Business or Pyramid and Ponzi Schemes?"

As the authors point out, ICOs (Initial Coin Offerings) aren't necessarily frauds. Many are crowdfundings by wannabe entrepreneurs, with investors buying tokens as digital stock certificates. Unregulated penny stocks for the digital age!

Could ICOs become a significant threat to the wealth of HNWIs?

1 comment:

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