How to discourage family members from indulging in virtual currency scams?

Recently, Haikou police cracked a mega-network pyramid scheme in the name of online virtual currency "Asian-European currency". Hainan Trans-Asia-Europe Network Competition Co., Ltd. (hereinafter referred to as Trans-Asia-Europe Company) has developed more than 47, internal and external members in many provinces and cities nationwide in just one year, involving a total amount of 4.6 billion yuan. Under the banner of state-owned enterprises and industry experts, the company used the Internet MLM platform to operate, and then held promotion meetings and forums to publicize its legitimacy and beautiful vision, which deceived a large number of investors. With the company's capital chain on the verge of breaking, investors' dream of "high rebates and high returns" is broken.

In fact, the business model of trans-Asia-Europe companies is a typical pyramid scheme.

what is virtual currency?

people who are not engaged in the financial industry are probably a little unfamiliar with online virtual currency. Look at Baidu's definition of virtual currency: in a broad sense, online virtual currency refers to the online equivalent of a certain issuer based on the public information network, with computer technology and communication technology as the means, stored in the network or related electronic equipment in digital form, and realized the circulation and payment functions by data transmission through the network system (including smart cards); In a narrow sense, virtual currency refers to a new form of currency that is different from tangible currency. It is issued by some big companies and usually appears in online games. Because of its certain value scale, it is often used as a 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, Q Point, and Shanda's coupons, Sina's micro coins (used for micro game and Sina to study), Chivalrous Yuanbao (used for Chivalrous Games), and Wen Yin (used for Bixue Love Games), etc. At present, there are hundreds of digital currency 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 that integrates production, supply and sales. Moreover, a group of professional workers who specialize in "playing money" has emerged; There are also exchange shops that specialize in exchanging various game coins.

bitcoin is the most famous virtual currency. Bitcoin (Bitkin) is a kind of online virtual currency at the earliest, and its quantity is limited, which is similar to Tencent's Q coins, but it can be used to buy real-life items, cash out and convert into currencies of most countries. It is characterized by decentralization, anonymity, and can only be used in the digital world. It does not belong to any country or financial institution, and it can be exchanged anywhere in the world, so it is used as a money laundering tool by some lawless elements. In 213, the US government recognized the legal status of Bitcoin, which made the price of Bitcoin soar. In China, on November 19th, 213, one bitcoin was equivalent to 6,989 RMB.

on may 12, 217, a global bitcoin virus madly attacked public and commercial systems. More than 4 hospitals across the UK were attacked by extensive cyber hackers, and the National Health Service (NHS) was in chaos. Campus networks of many universities in China also collectively fell. 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 scheme is ultimately Ponzi scheme. Ponzi scheme is the name of investment fraud in the financial sector and the ancestor of Pyramid scheme. This deception was "invented" by a speculator named Charles Ponzi, and many illegal pyramid schemes used this trick to collect 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 in order to create the illusion of making money and then defraud more investment.

*** sexual characteristics

Although various Ponzi schemes are varied and ever-changing, they all have the * * sexual characteristics inherited from Ponzi, the "ancestor".

Low-risk, high-return anti-investment law

As we all know, it is the iron law of investment that the risk is proportional to the return, and "Ponzi scheme" often does the opposite. Liars often attract investors who don't know the truth with higher returns, but never emphasize the risk factors of investment. There may be differences in the returns of various cases, some of which are ridiculously high. For example, Ponzi promised to get a 5% return on his investment within 45 days, while others are stable and extraordinary returns. For example, Madoff assured his customers that the return is only about 1% every year, but he emphasized that "investment will 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 the funds for robbing Peter to pay Paul

As 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 a high demand on the capital flow of Ponzi scheme. Therefore, swindlers always try to expand the scope of customers and broaden the scale of absorbing funds in order to get enough space for funds to make up for it. Most scammers never refuse to add new funds, because the cake is bigger, not only the benefits are more considerable, but also the risk of capital chain breakage is greatly reduced, and the duration of the scam can be greatly extended.

The unknowable and unrepeatable 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, swindlers simply 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 the Boston Global Times once wrote an article to expose Ponzi's scam, but Ponzi refuted it on the grounds that he did not understand financial investment. Madoff is also mystifying, never telling others the secret of making a steady 1% investment every year.

Anti-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, the investment projects always seem to make a steady profit. It seems that the 1,-mu afforestation plan has never been affected by climate, environment and geography. Madoff's hedge funds on Wall Street have also been able to survive several financial crises in the past 2 years. These investment projects always show anti-law characteristics that violate the investment cycle.

Pyramid characteristics of investor structure

In order to pay the high return of investors who join first, Ponzi scheme must be continuously developed and offline, attracting more and more investors to participate through inducement, persuasion, family ties and connections, thus forming a pyramid-like investor structure. A few insiders at the top of the tower make profits by squeezing a large number of participants at the bottom and in the tower. Even Madoff, the inscrutable former chairman of the board of directors of NASDAQ, inevitably wooed off-line conventions, and made extensive use of friends, family and business partners to develop off-line. Some people got commissions for successfully attracting foreign investment, and the off-line developed into a new off-line, snowballing into a pyramid structure.

You need to be cautious when investing

Then, back to pyramid schemes, 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 Economic Investigation Detachment of Haikou Public Security Bureau, introduced that the trans-Asia-Europe company promised that investors will enjoy high rebate profits when they buy "Asian-European currency". For example, if a member invests 1, yuan, taking the increase of .5 yuan as an example, after 25 days of thawing, the interest with interest can reach 22,5 yuan and the net profit is 12,5 yuan.

2. Under the banner of state-owned enterprises and industry experts, Haikou police reported that trans-Asia-Europe companies claimed to have a state-owned background and the investment platform was highly reliable; The suspect Liu claimed that he was an expert in the field of virtual digital currency in China. The police investigation found that these "tall" labels were actually fabricated by criminal suspects. They also had a "black history" of illegal online pyramid schemes in other provinces.

3. "Brainwashing" investors It is understood that trans-Asia-Europe companies have held promotion meetings and forums in luxury hotels in several cities in China to "brainwash" investors. Agents at all levels also publicize their beautiful vision by setting up WeChat groups, and let many individual investors participate in the purchase of "Asian-European currency".

With the development of pyramid selling today, many people will lament that "there are too many scammers and their brains are not enough". In fact, the essence of being deceived is because swindlers have grasped the weakness of human nature and successfully used some people's thinking modes of greed, indolence, getting rich overnight and so on. Similarly, you should be practical in investing, and don't always try to make a profit, or even make a profit without money, and there is no lunch that falls from the sky.