Ponzi Scheme

  • A trick/fraud that makes people think that their assets are being managed, even though they are not.
  • On the contrary, why does this work? (blu3mo)
    • It could be a fraud where the operators run away with the invested money, but wouldn’t it be simpler to just borrow money and run away?
    • However, it seems that the Ponzi scheme is an excellent story for borrowing money.
      • It’s harder to be exposed.
    • Normally, when making an investment, you would enter into a contract for an investment trust, but they skillfully deceive people by saying, “If we enter into a money lending contract, the principal will be guaranteed.”

    • There is no guarantee of principal in investments, so you should realize that it is a fraud at this point.