Following the advent of MMM in Nigeria, there has been an instant explosion in the Ponzi industry in Nigeria with many Ponzi platform targeting innocent Nigerians, who out of their quest to better their financial lots have lost huge sums of money to these platforms.
A Ponzi scheme is a simple but alarmingly effective scam that lures in new investors with the promise of unusually high returns.
Here’s how it works: a promoter convinces people to invest in their scheme. These initial investors receive what they believe to be returns, but are actually payouts from the money deposited by newer investors.
Now satisfied that the scheme is legit, those investors who received payouts pump more of their money into the scheme and encourage others to do the same.
Sooner or later, the scheme collapses when the promoter runs off with the money or it becomes too difficult to lure new investors.
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These types of pyramid schemes are nothing new and can be easy to spot, but that hasn’t stopped some crypto buyers from being scammed in a handful of high-profile incidents.
The major way to avoid being a victim to these scam sites is to look out for cryptocurrency projects that encourage you to recruit new investors to enjoy bigger profits and you must never trust any scheme that promises returns that sound too good to be true or outrageous.