Get to know Ponzi Scheme, Fraudulent Investments That Make Your Wallet Drag

Ponzi Scheme

Investment trends are currently being loved by many people in Indonesia. Many assets are currently starting to appear on the exchange, ranging from stocks, forex, to the most recent, digital assets in the form of cryptocurrencies.

Unfortunately, this investment trend is often exploited by irresponsible parties by creating fraudulent investments. Of the many fraudulent investments that exist, the majority of them use a classic scheme that is quite capable.

The scheme in question is a Ponzi scheme. This scheme has actually been around for a long time in the financial world. However, the low level of public financial literacy means that Ponzi schemes are still thriving today.

So, what is a Ponzi scheme? This article will provide a little explanation for you, starting from understanding, how it works, to the characteristics of investing using a Ponzi scheme.

What is a Ponzi Scheme?

The name of the Ponzi scheme comes from an Italian mobster named Charles Ponzi. Ponzi created a fraudulent scheme with the concept of a fraudulent investment that can make its victims believe that the investment they are making is good and safe.

In fact, in the concept that was sparked by Ponzi in 1920, victims would be asked to deposit a certain amount of money to themselves in order to get benefits. Then, the victim will be asked again to bring in new investors so that they can benefit.

This concept eventually became known as Ponzi and is often used in fraudulent investment practices today.

How Do Ponzi Scheme Work?

Ponzi schemes simply work with the system, “the rich get richer, the poor get poorer”. Usually, investors who are in top positions will receive payments from investors they invite to join.

Later, the investors they invite to join will be asked to find new investors so that the investors they invite can get income. Well, investors who are in top positions most likely will not work to find clients because the profits are already flowing, where do they come from?

The profits are pouring in from the investors he recently recruited and are currently recruiting new investors to make a profit. The more new investors are invited, the more profits will be obtained by investors who are in the top position.

Ponzi schemes can actually be destroyed if there is no flow of funds from new investors. So, when new investors decide not to join or leave this scheme, over time the flow of funds will stop.

When the flow of funds is stagnant, investors who are in the top positions will also not get income. Only such methods can destroy a Ponzi scheme.

Characteristics of Foolish Investments Adherents of Ponzi Scheme

So, so that you don’t fall for fraudulent investments that use Ponzi schemes, we will discuss a little about the characteristics of investments that use Ponzi schemes. We report these characteristics directly from the official website of the Financial Services Authority (OJK) of the Republic of Indonesia.

  1. Promising Maximum Profit with Minimal Risk

Fraudulent investments that use Ponzi schemes will usually use the lure of promising maximum profits, but only requiring very small risks..

In fact, in the investment concept, big profits will be followed by big risks too. So, if you are invited to make an investment with maximum profit, but minimal risk, you need to be vigilant.

  1. Unclear Investment System

Fraudulent investments with this scheme usually have an unclear investment work system. In fact, if you ask about how the investment process works, you will not be explained in detail.

Even if explained in detail, fraudsters will usually explain using language that is difficult to understand. Thus, investors will only be asked to accept it.

  1. Unclear Investment Products

In addition to the unclear investment system, Ponzi schemes usually present unclear investment products. In addition, the product may also be a product belonging to a foreign country whose origin is unknown.

In fact, there are also investments where the goods don’t actually exist and are just circulating money, as there was a fraudulent investment case called Humans Helping Humans (MMM) that was closed by the OJK in recent years.

  1. Investment Income Not Affected by Economic Movements

As in general, a healthy investment will definitely be affected by existing economic conditions. However, investment in this scheme will not be affected by any economic movements.

Usually, investors will still get the usual rewards, even though the economic conditions are not good. If you meet an investment like this, you need to be vigilant, OK?

  1. Investment Income Earned from Referring People

In the existing investment concept, income is always obtained from dividends or profits obtained from the company where we invest. No investment earns income from inviting other people to invest.

If you come across an investment that earns income from referring other people, it sounds like you need to be wary. Usually, these schemes use such systems to ensnare even more victims.

  1. The Lure of Bigger Flowers

In a Ponzi scheme, it is not uncommon for fraudsters to offer greater interest or income if you want to withdraw your income or get out of the investment.

The lure of greater income or interest will make you stay and continue to be a victim of a Ponzi scheme. In fact, not infrequently there are those who ask investors to deposit a certain amount of money as a condition.

  1. Drag Fund Withdrawal

When you withdraw funds from an investment with this scheme, you will usually be made difficult by the manager. They will use various reasons to get more profit.

Moreover, when you want to get out of the fraudulent investment scheme, you will be prevented from leaving. It could be that you will be lured by bigger profits or just held back.


So, that was a little explanation about the concept of fraudulent investment with a Ponzi scheme. So, from now on, as much as possible you should avoid investments that have characteristics like the Ponzi scheme above.

Apart from that, you can also check whether the company you are investing in is under the supervision and approval of the FSA. If indeed the company is not under the FSA, you need to be vigilant and should just leave it.


Redaksi Media
Author: Redaksi Media

Cryptocurrency Media

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