Ponzi scheme

What is the main characteristic of a Ponzi scheme?

• Selling physical goods for profit

• Paying returns to old investors using new investors’ money

• Investing in government bonds

• Trading foreign currency on the open market

The term “Ponzi scheme” is named after:

• A U.S. law that banned fake investments

• An Italian banker in the 1800s

• Charles Ponzi, who ran a postage stamp investment scam in the 1920s

• A fictional character from a movie

In a Ponzi scheme, where do the “profits” for early investors usually come from?

• Company revenue from legitimate sales

• Interest earned from the bank

• Money from later investors

• Government subsidies

Which of these promises would most likely indicate a Ponzi scheme?

• “Your returns depend on stock market conditions”

• “We can double your money in 3 months with zero risk”

• “You may lose some or all of your investment”

• “Our profits come from multiple diversified business activities”

Which sector has been increasingly targeted by Ponzi scheme operators in recent years?

• Agriculture

• Cryptocurrency and digital assets

• Public transportation

• Water purification

Which of the following is a good way to protect yourself from a Ponzi scheme?

• Only invest with friends and family

• Trust investments that guarantee high returns quickly

• Check for regulatory registration and licensed investment advisors

• Join early before the scheme collapses

Ponzi schemes usually collapse when:

• The government bans cryptocurrency

• There aren’t enough new investors to pay earlier ones

• The company’s CEO retires

• Interest rates drop too low

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