What is a ponzi scheme?
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A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.
TL;DR: Old investors are getting paid ("proof it is legit") from funds brought in by new investors. When there are no new investors, the ponzi scheme collapses, and everybody loses their money, except the owner of the scheme.
WTF is Coin Generation?
Coin Generation is a ponzi scheme advertised by dealmeida in this thread: http://www.hackforums.net/member.php?act...uid=454945
There is no proof at all that it has anything to do with Crypto Currency! Even Dealmeida acknowledges it:
(06-28-2013 04:08 AM)Starbreak Wrote:
Can you let me know how this ponzi scheme is related to cryptocurrency?
(06-28-2013 07:03 AM)dealmeida Wrote:
Someone moved the thread, this was actually created on the section: "Lounge"
How do you know it is a ponzi scheme?
High investment returns with little or no risk. Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Be highly suspicious of any “guaranteed” investment opportunity.
Coin Generation definitely looks like they are guaranteeing "free money".
Overly consistent returns. Investments tend to go up and down over time, especially those seeking high returns. Be suspect of an investment that continues to generate regular, positive returns regardless of overall market conditions.
So far, they have been offering returns from their "supercomputer" magically.
Unregistered investments. Ponzi schemes typically involve investments that have not been registered with the SEC or with state regulators. Registration is important because it provides investors with access to key information about the company’s management, products, services, and finances.
The 555 California Street address listed on their website belongs to a virtual office (i.e rent a fake office). Google it and you will see many sites with the same address. They don't have a real office, so how can they have a legal registration?
Unlicensed sellers. Federal and state securities laws require investment professionals and their firms to be licensed or registered. Most Ponzi schemes involve unlicensed individuals or unregistered firms.
Who's running this site? Dealmeida, who is constantly advertising it?
Secretive and/or complex strategies. Avoiding investments you don’t understand or for which you can’t get complete information is a good rule of thumb.
"Our goal is to create the most powerful super computer in the world by combining the computational power of all computers (this type of computer is used in climate modeling, calculating satellite orbits, bio-mechanics and other areas)"
What sort of bullshit is this? Does it make sense? Nope. Money doesn't grow on trees. It is impossible to create money with some new world order illuminati magic, unless you are running a ponzi scheme.
Issues with paperwork. Ignore excuses regarding why you can’t review information about an investment in writing, and always read an investment’s prospectus or disclosure statement carefully before you invest. Also, account statement errors may be a sign that funds are not being invested as promised.
These guys don't have paperwork (obviously). No proof that they are actually doing some magic supercomputing shit and not paying old investors with new funds.
Difficulty receiving payments. Be suspicious if you don’t receive a payment or have difficulty cashing out your investment. Keep in mind that Ponzi scheme promoters sometimes encourage participants to “roll over” promised payments by offering even higher investment returns.
Payment issues are aplenty in this subforum.
TL;DR: Don't waste your money and time on this scam.
What should I do?
If you were planning to invest in their magical 'threads', don't. Stay away from this scam. Don't come whining about it a month later if you choose to ignore this.
Some info copied from fed site: http://www.sec.gov/answers/ponzi.htm
Any donations/money saved goes to the signature in my address.
