VES warns people for revival of pyramid schemes
The Association of Economists in Suriname (VES) recently issued a statement, indicating that it deemed it necessary to warn the people about suspected pyramid schemes that are popping up in Suriname under various names.
A pyramid scheme is an illegal investment scam based on a hierarchical setup. New recruits make up the base of the pyramid and provide the funding, or so-called returns, the earlier investors/recruits above them receive.
A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources. Ponzi games pop up worldwide under various names but are always illegal. The Ponzi fraud has strong similarities with the pyramid scheme but the important difference is that members do not actively recruit new participants. New members are recruited through ad campaigns. The existing participants do not get any commission based on the number of participants that they recruit but their returns depend on the investment and the investment period. This is why it is easier to disguise this construction as an investment product. Onecoin and Swisscoin are being advertised as virtual cryptocoin, based on cryptocurrencies, with a private blockchain. Both systems are based on investing in one’s own cryptomoney which does not have any real value outside of the Onecoin and Swisscoin organizations. Investors risk not getting their investment back. There also is no guarantee that they will actually receive interest. The VES is therefore advising people to steer clear of such schemes and to be cautious with their income and savings. There have been several incidents in the past where Surinamese people were left with nothing after having invested money in Ponzi schemes. “If it sounds too good to be true, it probably is.”