In fact, the business model of trans-Asian-European companies is a typical pyramid scheme.
What is virtual currency?
People who are not engaged in the financial industry are probably a little strange to online virtual currency. Look at Baidu's definition of virtual currency: in a broad sense, network virtual currency refers to the online equivalent of an issuer based on public information network, by means of computer technology and communication technology, stored in digital form in the network or related electronic equipment, and realized the circulation and payment functions by data transmission through network systems (including smart cards); Virtual currency in a narrow sense refers to a new form of currency that is different from tangible currency. Issued by some big companies, it usually appears in online games. Because it has a certain value scale, it is often used as the payment currency for virtual transactions.
In other words, virtual currency refers to the substitute currency circulating in the virtual world of the network, and refers to the unreal currency. Well-known virtual currencies, such as Baidu's Baidu Coin, Tencent's Q Coin and Q Point, as well as grand coupons, Sina's micro coins (used for micro game and Sina to study), Chivalrous Yuanbao (used for Chivalrous Games), Wen Yin (used for Bixue Love Games) and so on. At present, there are hundreds of digital currency species distributed all over the world. At present, the online trading in the virtual world has greatly exceeded people's imagination, and has formed a huge online trading market integrating production, supply and sales. Moreover, a group of professional workers who specialize in "playing with money" have emerged; There are also exchange shops that specialize in exchanging various game coins.
One of the most famous virtual currencies is bitcoin. Bitcoin (Bitkin) was originally a kind of online virtual currency, with a limited quantity, similar to Tencent's Q coins, but it can be used to buy real-life items, cash them out and convert them into currencies of most countries. Its characteristics are decentralization and anonymity, and it can only be used in the digital world. It does not belong to any country or financial institution and can be exchanged anywhere in the world, so it is used as a money laundering tool by some lawless elements. In 20 13, the US government recognized the legal status of Bitcoin, which made the price of Bitcoin soar. In China, a bitcoin in October 20131kloc-0/9 is equivalent to 6989 RMB.
20 17, 12 On May 2nd, a global outbreak of bitcoin virus attacked public and commercial systems crazily. More than 40 hospitals in Britain were attacked by large-scale cyber hackers, and the National Health Service (NHS) was in chaos. Campus networks of many universities in China have also collectively fallen. Nearly 74 countries around the world have been seriously attacked.
Virtual currency itself is not a pyramid scheme, but it is not uncommon to conduct virtual fraud under the guise of bitcoin or virtual currency. In fact, they have nothing to do with virtual currency.
Ponzi scheme
MLM is a Ponzi scheme after all. Ponzi scheme is the name of investment fraud in the financial field and the originator of pyramid schemes. This scam was "invented" by a speculator named Charles Ponzi, and many illegal pyramid schemes used this trick to make money. Ponzi scheme is also called "robbing Peter to pay Paul" and "empty gloves and white wolves" in China. In short, it is to use the money of new investors to pay interest and short-term returns to old investors, so as to create the illusion of making money and then defraud more investment.
Common characteristics
Although all kinds of Ponzi schemes are varied and ever-changing, they all have the common characteristics inherited from Ponzi, the ancestor.
Anti-investment law with low risk and high return
As we all know, the iron law of investment is that risk is proportional to return, and Ponzi scheme is often counterproductive. Liars often attract investors who don't know the truth with higher returns, but never emphasize the risk factors of investment. The rate of return in various situations may be different, and some are ridiculously high. For example, Ponzi promised to get a 50% return on investment within 45 days, and the rest were stable and extraordinary returns. For example, Madoff assured customers that the annual return was only about 10%, but he stressed that "investment must be earned and there will be no loss". But in any case, swindlers always try to design an investment path far higher than the average market return, and never reveal or emphasize the risk factors of investment.
Characteristics of capital flow in robbing Peter to pay Paul.
Because the promised return on investment cannot be realized at all, the return on investment for old customers can only be realized by joining new customers or other financing arrangements. This puts high demands on the capital flow of Ponzi scheme. Therefore, scammers always try their best to expand the scope of customers and broaden the scale of absorbing funds in order to get enough funds to make up for the space. Most scammers never refuse to add new funds, because the cake is bigger, not only the income is more considerable, but also the risk of capital chain breakage is greatly reduced, and the duration of the scam can be greatly extended.
The unknowability and unrepeatability of investment know-how
Liars try their best to play up the mystery of investment, keep the investment know-how secret, and try their best to shape their image as "genius" or "expert". In fact, due to the lack of real investment and production support, scammers have no "way to make money" for careful scrutiny, so keeping the mystery of investment as much as possible and publicizing the non-replicability of investment is one of their effective tricks to avoid external doubts. At that time, a reporter from Boston Global Times wrote an article to expose Ponzi scheme, but Ponzi refuted it on the grounds that he didn't understand financial investment. Madoff is also mystifying, never telling others the investment know-how of stable profit 10% every year.
Counter-cyclical characteristics of investment
The investment projects of Ponzi scheme never seem to be affected by the investment cycle. Whether it is industrial investment related to production or financial investment related to market conditions, investment projects always seem to make a steady profit. It seems that the afforestation plan of 10,000 mu has never been affected by climate, environment and geography. In the past 20 years, Madoff's hedge funds on Wall Street have survived several financial crises. These investment projects always show the anti-law characteristics of violating the investment cycle.
Pyramid characteristics of investor structure
In order to pay the high returns of the first investors, Ponzi scheme must develop continuously, attracting more and more investors through inducement, persuasion, affection and connections, thus forming a "pyramid" investor structure. A few insiders at the top of the tower make profits by squeezing a large number of participants at the bottom and inside the tower. Even Madoff, the former chairman of Nasdaq's board of directors, inevitably wooed the downline and made extensive use of friends, family and business partners to develop the downline. Some people successfully attracted foreign investment to get commissions, went offline to develop new offline and snowballed into a pyramid structure.
Investment needs to be cautious
Then, back to MLM, how did it make so many investors cheated in a short time?
1. Attract members to invest with "high rebate and high income". Ren Jian, deputy detachment leader of the Economic Investigation Detachment of Haikou Public Security Bureau, introduced that Pan Asia Company promised that investors would enjoy high rebate profits when purchasing "Euro-Asian currency". For example, the investment of members is 654.38+00000 yuan, taking an increase of 0.05 yuan as an example. After thawing for 250 days, the interest with interest can reach 22,500 yuan, and the net profit is 654.38+02,500 yuan.
2. Under the banner of state-owned enterprises and industry experts, Haikou police reported that Pan Asia Company claimed to have a state-owned background and built a highly reliable investment platform; The suspect Liu claimed to be an expert in the field of virtual digital currency in China. Police investigations found that these "tall" labels were actually fabricated by criminal suspects. They also have a "black history" of illegal online pyramid schemes in other provinces.
3. "Brainwashing" investors It is understood that Pan Asia and European companies hold promotion conferences and forums in luxury hotels in several cities in China to "brainwash" investors. Agents at all levels also promote their beautiful vision through the establishment of WeChat group, and let many individual investors participate in the purchase of "Asian-European currency".
Today, when pyramid schemes are developed, many people will lament that "there are too many liars and not enough brains". In fact, the essence of being deceived is because the swindler has grasped the weakness of human nature and successfully used some people's thinking patterns such as greed, laziness and getting rich overnight. Similarly, investment should be practical, don't always think about making profits, even if you don't make money, you should make profits. There is no lunch that falls from the sky.