What Are Crypto Ponzi Schemes?

A Ponzi scheme is a fraudulent investment operation where returns are paid to existing investors from funds contributed by new investors rather than from profit earned by the operator. For example, in the case of a crypto Ponzi scheme, the operator typically promotes a new or obscure cryptocurrency and encourages people to invest in it by promising high returns. The operator may also use various tactics to create the illusion of a successful investment, such as showing fake transaction history…