Crypto Ponzi Schemes

Crypto Ponzi schemes are a type of investment fraud where investors are promised high returns with little or no risk. However, the promoters of these schemes are simply taking investors' money and using it to pay off earlier investors. Eventually, the scheme collapses and investors lose their money.

Ponzi schemes are fraudulent investment operations that rely on new investors' funds to pay off returns to earlier investors, creating an illusion of profitability. While it is difficult to determine the exact amount of money lost specifically in crypto Ponzi schemes, there have been numerous high-profile cases involving substantial sums of money.

As the largest form of cryptocurrency-based crime and one uniquely targeted toward new users, crypto scams pose one of the biggest threats to cryptocurrency’s continued adoption. But as we’ll explore, some cryptocurrency businesses are taking innovative steps to leverage blockchain data to protect their users and nip scams in the bud before potential victims make deposits.

The average amount taken from each victim increased. Scammers’ money laundering strategies, however, haven’t changed all that much. As was the case in previous years, most cryptocurrency sent from scam addresses ended up at mainstream exchanges.

As per a report published by blockchain intelligence firm TRM Labs on June 28, a combined $7.8 billion was paid to cryptocurrency pyramid and Ponzi schemes worldwide in 2022. In addition, another $1.5 billion in crypto was alleged by TRM to have been spent on darknets for illicit activities, while another $3.7 billion in crypto was lost in hacks or exploits.

Despite a collapse in cryptocurrency prices from the ongoing bear market, it appears that there has been no corresponding slowdown in crypto-related crime. The Securities and Exchange Commission is vastly expanding its fight against cryptocurrency fraud by hiring more than a dozen new employees to combat cybercrime.

Cryptocurrencies are a volatile asset class and your investment could lose all of its value. The fact is if an investment promises high returns with little or no risk, it's probably a scam. The learning curve is , only share your personal information to the people you trust.