Developer Shuts Down Fake Cryptocurrency PonziCoin after Things Go “Crazy Out of Hand”

By
Saruni Maina
-
25
PonziCoin

People will never cease to amaze and the level of stupidity that human beings express sometimes surpasses any that we have seen before. It is one thing to fall for a Ponzi Scheme that was disguised as something legitimate but when someone takes the extra effort of warning you that you may lose all your money and you still jump in with your two feet, that is on you.

Back in 2014, a crafty developer created a cryptocurrency and aptly named it PonziCoin. The idea was that it was to operate like a proper Pyramid scheme, where early investors would need to invite more people to invest in this coin in order for them to make money. Well, things didn’t go as planned as he waited for people to invest in the said cryptocurrency and he made off with approximately $7000, which is around $2.2M in today’s value, without giving any payouts to anyone.

With the sudden spiral of cryptocurrency in the world, we have already seen quite a number of people lose money through fake ICOs (Initial Coin Offerings) and collapsing platforms, but people never learn and to prove this, a San Francisco based developer, Rishab Hegde, “jokingly” built a cryptocurrency based on Ethereum and named it PonziCoin – an exact copycat of what happened back in 2014.


Rishab Hedge went ahead to warn the investors on the coin that it was a Ponzi Scheme, “The world’s first legitimate Ponzi scheme,” reads the coin’s landing page. The bliss does not end there, the developer adds more warnings in the Frequently Asked Questions section:

Q: Is this a scam?

 

A: Yes, it’s as much a scam as 99% of the ICOs out there, but it’s more transparent about it 🙂

and another one:

Q: This seems to be too good to be true, how am I getting screwed?

 

A: It’s a literal pyramid scheme. You are fairly likely to be one of the last people to buy PonziCoins, so another 100 tokens probably will not be sold and the price may not ever double again, in which case you could lose up to 75% of your investment. There’s also a chance the contract runs out of money or gets hacked in which case you could lose all of your investment.

Despite giving the warnings, the developer then encourages investors to buy the coin telling them to think of the Lambos (Lamborghinis) they’ll soon own.

So how does PonziCoin work? One would be required to buy Ether (Ethereum) coins and then use them to buy the PonziCoin tokens. Then the PonziCoin platform (known as the contract) would automatically double the price of the coin, after every 100 token purchases, i.e. if you bought the PonziCoin at Ksh.1000 and 100 tokens are sold after the time you bought, the price goes to 2000, then 100 more tokens are sold and it doubles again to 4000, then 8000 and so on. Get it? Hope so.

Now here’s the major news; People actually invested in the Ponzi scheme. Maybe with the hopes of being the early investors and cashing out before everything collapses. After around 8 hours, PonziCoin had attracted attention and the platform had collected around 250 Ether coins ( valued at more than $250,000). This was an almost “too good to be true” scam like the Bitcoin Revolution and other Bitcoin Robots that have emerged in late 2017’s.


Mr Rishab seems to have gotten cold feet due to the attention and he decided to pull the plug on PonziCoin, leaving investors out it the cold and possibly making away with their money since none of the investors got a payout on their investment. An update on the website reads:

This has gotten crazy out of hand, I apologize but we will no longer be selling PonziCoin on this site because this was a joke. I cannot terminate the contract but I will not be selling any coins that I own.

Whenever we start to have faith in humanity, people just go ahead and prove us wrong by proving that there will always be greater fools out there.

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25 COMMENTS

  9. […] Man who started joke “PonziCoin” virtual currency scheme forced to shut it down after people actually invest more than $250,000. “Q: This seems to be too good to be true, how am I getting screwed? A: It’s a literal pyramid scheme. You are fairly likely to be one of the last people to buy PonziCoins, so another 100 tokens probably will not be sold and the price may not ever double again, in which case you could lose up to 75% of your investment. There’s also a chance the contract runs out of money or gets hacked in which case you could lose all of your investment.”   https://https://techweez.com/2018/01/26/ponzicoin-crypto-scheme/ […]

  19. […] Because existing businesses face regulatory hurdles if they want to raise capital by selling stock and banks often have stringent requirements that businesses prove their good credit and viability, the reverse ICO seemed like an easy, unregulated way to raise money with few strings and no oversight. The temptation to do so was even stronger when parody coins like PonziCoin that openly warned investors that the ICO was a scam still made an estimated $250,000. […]

  21. […] As a result of current companies face regulatory hurdles in the event that they need to increase capital by promoting inventory and banks usually have stringent necessities that companies show their good credit score and viability, the reverse ICO appeared like a simple, unregulated approach to increase cash with few strings and no oversight. The temptation to take action was even stronger when parody cash like PonziCoin that brazenly warned buyers that the ICO was a rip-off nonetheless made an estimated $250,000. […]

  22. […] Como as empresas existentes enfrentam obstáculos regulatórios se quiserem levantar capital com a venda de ações e os bancos muitas vezes têm requisitos rigorosos para que as empresas provem seu bom crédito e viabilidade, a ICO reversa parecia uma maneira fácil e não regulamentada de levantar dinheiro com poucos cordões e nenhuma supervisão. A tentação de fazer isso foi ainda mais forte quando paródias de moedas como PonziCoin, que alertavam abertamente os investidores de que o ICO period um golpe ainda feito cerca de $ 250.000. […]

  23. […] As a result of current companies face regulatory hurdles in the event that they wish to elevate capital by promoting inventory and banks usually have stringent necessities that companies show their good credit score and viability, the reverse ICO appeared like a simple, unregulated strategy to elevate cash with few strings and no oversight. The temptation to take action was even stronger when parody cash like PonziCoin that brazenly warned traders that the ICO was a rip-off nonetheless made an estimated $250,000. […]

  24. […] As a result of present companies face regulatory hurdles in the event that they wish to increase capital by promoting inventory and banks usually have stringent necessities that companies show their good credit score and viability, the reverse ICO appeared like a straightforward, unregulated method to increase cash with few strings and no oversight. The temptation to take action was even stronger when parody cash like PonziCoin that overtly warned traders that the ICO was a rip-off nonetheless made an estimated $250,000. […]

  25. […] As a result of present companies face regulatory hurdles in the event that they wish to increase capital by promoting inventory and banks typically have stringent necessities that companies show their good credit score and viability, the reverse ICO appeared like a straightforward, unregulated solution to increase cash with few strings and no oversight. The temptation to take action was even stronger when parody cash like PonziCoin that overtly warned traders that the ICO was a rip-off nonetheless made an estimated $250,000. […]

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