#naurtnft

Ponzi Schemes are fraudulent investment opportunities that draw in new investors with promises of abnormally consistent high returns and little-to-no risk, and pay those returns to old investors with the funds from new investors.

[Read more about Ponzi Schemes on Wikipedia]

An example of a cryptocurrency Ponzi scheme (also called a "smart Ponzi") is the TerraUSD "algorithmic stablecoin"--and its partner coin TerraLUNA--that lost its peg to the dollar and collapsed in 2022. The collapse wiped out $45 Billion in a week, and had rippling effects on other currencies and exchanges.

Signs of a ponzi scheme include, but are not limited to: unusually high and/or consistent returns advertised as little-to-no risk, unlicensed sellers/unregistered firms, secretive strategies (often times obscured by the use of buzzwords and long explanations that don't actually mean anything substantial), and difficulty receiving payment or "cashing out"