My takeaway from this thread is that people like to argue for the sake of arguing. I agree with the OP that a Ponzi scheme is a specific thing, and that the definition should be kept there or we run the risk of accidentally including large chunks of the “real” financial system in the definition. I agree that cryptocurrencies have been involved in various types of frauds, some of them being Ponzi schemes.
My hubby won a little money in the lottery recently, and mentioned it over the phone to an old friend who lives several hours away, a guy we have coffee with maybe once every 2 years. The friend started talking about this amazing investment opportunity he’s discovered, based on crypto and virtual reality, where you’re guaranteed a 30% return but it’s usually much more, and he had already put in 40 grand and was impressed with the results he had had in just a few weeks, and he was in the process of putting in more, and he had put the down payment on a large chunk of real estate in the woods to build his mega-mansion on, and would my hubby be interested, etc.
It’s hard to know what to say to that. You don’t want to tell your friend that he’s been had. Hubby said “No thank you, I don’t trust this investment firm and you should avoid putting in more money” , which the friend blew off of course. He had given a name for the “investment company”; we looked it up later, it had changed names a few times in the preceding months, had a beautiful website which had a whole bunch of tech-sounding buzzwords assembled into sentences that made no sense. The accent was on virtual reality, that week. Crypto was in the mix but they didn’t even bother to give a specific name for the currency.
The friend then texted hubby a couple of times over the ensuing weeks to try to get hubby to invest, and then he went silent.
This was certainly a fraud, and possibly a Ponzi scheme. A specific entity promising specific, non-realistic returns. We don’t know what would have happened if the friend had asked for his money back, he seemed to be relying on his “statements” to estimate his gainz. Crypto may have been involved, there’s no way to tell; it was certainly invoked. But the main weapons were ignorance and gullibility.
