Online Currency Actually A Big Ponzi Scam

from the wonderful dept

Remember during the bubble years when you couldn’t open a website without seeing yet another form of internet currency? Apparently, one of them, that claimed it was actually “gold backed” was simply a big ponzi scheme that was discovered when the guy who ran it stopped making payouts and hightailed it to Mexico. Those who lost money have sued him and a bunch of others, including some Latvian banks who apparently were partners to the project. The article linked here is about how one of those banks can be included in the lawsuit, as the bank tried to dismiss the charges. Either way, it does raise legitimate issues about how people can trust any kind of internet-based currency system.

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Comments on “Online Currency Actually A Big Ponzi Scam”

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1 Comment
Steve Mueller (user link) says:

Somebody Bought This?

At the height of its popularity, the OSGold currency boasted more than 60,000 accounts created by people drawn to promises of “high yield” investments that would provide guaranteed monthly returns of 30 percent to 45 percent.

I can’t believe anybody fell for this. A yearly yield of 30-45% would be considered incredible, but the article claimed that was a monthly guarantee!

While you certainly can have investments perform that well over the short term (I had stock options in 1998 that basically quadrupled when I sold them a year later), I haven’t heard of any investment that comes close to that over the long term ? much less one that’s guaranteed to do so.

I guess P. T. Barnum was proved right once again.

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