Understand how pyramid scheme promises gains with bitcoin – 08/29/2021 – Market

Investing in an innovative asset that guarantees a fixed return at rates far superior to any traditional applications and that, in addition, is accessible through simplified transactions and intermediated by trusted people, such as relatives and friends.

This is the recipe for a centuries-old scam that continues to attract victims: the financial pyramid.

Last Wednesday (25), the Federal Police launched an operation to, according to investigations, dismantle a millionaire financial pyramid scheme that attracted investors with the promise of investments in cryptocurrencies.

Carried out in conjunction with the IRS and the Gaeco (Group for Special Action to Combat Organized Crime) of the Federal Public Ministry, the Kryptos operation arrested the suspect in organizing the alleged scheme, businessman Glaidson Acácio dos Santos, responsible for GAS Consultoria Bitcoin , headquartered in Região dos Lagos (RJ).

Santos’ defense denies the existence of the pyramid scheme and guarantees that the return offered to customers is the result of efficient management carried out by GAS in the cryptocurrency market.

According to the account of a client, who was convinced to hire GAS by a person close to her family, the promised return is 10% of the total amount invested per month, during a period of 24 months. At the end of this period, the company states that it will return the amount invested.

In the case reported to the report, an investment made by the family a little over six months ago was R$100 thousand and, so far, payments are up to date: R$10 thousand per month.

For the Federal Police, however, the promised gains are unsustainable, a position that is reaffirmed by specialists.

The monthly return of 10% in a period when the basic interest rate (Selic) is at 5.25% per year is the main sign that the application is unfeasible, says Mayra Lima, an investment specialist at brokerage Guide.

The argument of the supposed application in cryptocurrencies is efficient to convince laymen, according to Lima.

“We’re talking about an asset that still has no regulation in the country, so it seems like a no man’s land,” says the expert.

“There are funds that invest in bitcoin, but when we talk about variable income, as in the case of investments in cryptocurrencies, it is not possible to guarantee a fixed return because we don’t know if they will continue to appreciate”, he explains.

If the fixed return on applications like this is impossible, how to explain that victims of such schemes receive payments on time?

This enigma is explained by the Ponzi scheme, as the financial pyramid system operated in the United States by the Italian immigrant Charles Ponzi in the 1920s became known.

The default in pyramids occurs at some point for at least part of the investors –probably those who join last–, says the investment specialist Marcelo Cambria, professor and graduate coordinator of Fecap (Fundação Escola de Comércio Álvares Penteado ).

“In the financial pyramid system, the main revenue is the remuneration for the appointment of new members. Victims are attracted by the opportunity to contribute resources, earning profits far above those that are possible under the usual market conditions”, says Cambria.

“This is very impressive to those who fall for the coup. It’s a financial structure that looks like an investment, but in practice it doesn’t work that way since there won’t be resources for everyone in an eventual generalized withdrawal of all members. It’s a product that promises and doesn’t deliver, because it is based on the permanent growth of the base: whoever enters finances the oldest participants, but as it does not generate income, the structure is not sustainable”, he says.


not to fall for scams

Guide’s investment expert, Mayra Lima, gives seven tips to avoid falling into financial scams

  1. Don’t believe in miracles. Be wary of someone who promises a lot of money without effort. Investing is a long-term job
  2. Check how much the basic interest rate of the Brazilian economy, the Selic, is yielding per month. If the promised is way above, something must be wrong
  3. Before investing in a particular company, look for references. Sites like Reclame Aqui can help by bringing together reviews from different consumers. It is also important to seek information from regulatory bodies such as the Central Bank and CVM (Securities Commission)
  4. Avoid the “herd effect”. The fact that all your friends or family are buying a certain asset does not mean that it is also good for you or that it is trustworthy.
  5. When investing, have a minimal understanding of the product and how it fits into your strategy. Even though the investment is consistent, it does not necessarily mean that it fits your profile.
  6. Watch out for pyramid signs. In addition to promises of unrealistic gains, pyramids are also characterized by requiring referrals from new people to ensure participants’ profits
  7. Seek expert guidance and check if the professional is certified by institutions such as CVM, Anbima (Brazilian Association of Financial and Capital Market Entities) and Planejar (Brazilian Association of Financial Planners)