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Ponzi Scheme

The Sky Is Not Falling: Why The Bitcoin Price Doesn’t Matter

10/05/2022 by Idelto Editor

The recent bitcoin price action demonstrates that it’s time for a more grown-up culture of building, development and adoption around Bitcoin.

“Bear markets are the best time to be alive and in the sector. It’s depressing for those that don’t know what they’re doing, it’s awesome for those that have a longer-term view.” – Simon Dixon

The difference between Bitcoin and everything else is that the price of bitcoin doesn’t matter. Over the long term the price of bitcoin has gone up, yes, but the value proposition of bitcoin as hard, non-confiscatable and truly decentralized money is really what matters. Not the price hype and not the pump. This is why traders and speculators have lost interest in Bitcoin, and continue to flock to the newest pumping decentralized finance (DeFi) or non-fungible token (NFT) project at the drop of a hat. This loss of interest from the speculators is viewed by many as a negative development for Bitcoin, but it is actually a very positive one. What we are seeing now represented in the lower bitcoin price is the value of its actual functional utility and the absence of retail speculation capital that was there before. This article will describe why that’s a good thing.

Since its inception, misguided analysts have described Bitcoin as a Ponzi scheme dependent on continued artificial speculation pumping into the space. As anybody with experience can tell you, speculators are shiny-object chasers by nature and pull out of any position the minute something shinier comes along. Well, the bitcoin “bear market” has arrived and all the speculators are gone. They got bored and took their toys home with them. Even with them gone, bitcoin is still valued at far higher than its 2020 and 2021 lows and is increasing adoption on an institutional (and sovereign) level. This adoption represents real value.

The stock market sugar rush caused by Federal Reserve Board money printing and negative real interest rates is ending, and the roller coaster is now going down from the top. This has had an impact not only on bitcoin, but on the stock market and the other altcoins as well. Put simply, everything is going down and after the chaos subsides we will see what assets, stocks and projects actually offer tangible, objective value. That’s what investment was always supposed to be about. Despite the confused dichotomy between “growth stocks” and “value stocks,” investing is by definition supposed to be about your long-term belief in the value of something, not in its short-term growth projections. Retail investors have struggled to comprehend this because of the get-rich-quick, everyone’s-a-genius market culture of the past few years. Indeed, if an asset like bitcoin isn’t constantly appreciating on a double- or triple-digit basis, then it’s a “failing” asset to these people. The market is on its head. As a result, the meme-stock crowd is out of bitcoin now, just like they are out of the stock market as a whole. Turns out the memers had paper hands all along.

This article by Bloomberg, titled “Day Trader Army Loses All The Money It Made In Meme-Stock Era,” details how many of the new traders that entered the space have “never seen a market that wasn’t supported by the Fed.” Retail traders lost all the gains they made in the Dogecoin, AMC and GameStop rallies, and are exactly back at square one.

Source: Morgan Stanley, Bloomberg

The entire market is falling right now and we need to rethink what a “good investment” is. Like the above chart from Morgan Stanley shows, the overall movements of retail trading have canceled out to zero since January 2020 despite their temporarily outsized gains in 2021. If we compare today’s bitcoin price to the January 2020 price, we still see a gain of 331% for bitcoin, outdoing the S&P 500’s return by a large margin and beating the overall retail trading profit of absolutely nothing by a margin of infinity. Do we need any more proof that HODLing is a superior strategy?

Source: Coindesk. January 1, 2020, BTC price: $7,175.50. May 9, 2022, BTC price: $30,943

Yes, bitcoin is down from its all-time high by half, but factoring in the incredible market distortions caused by unprecedented money printing, memestock manipulations and post-COVID-19 interest rates since early 2020, bitcoin still blows anything else out of the water. We just need to zoom out to a more “honest” market window in order to see this. Everybody is acting like the sky is falling, but again, that is only because most retail investors only entered the market in 2020 or 2021 and have never seen a market that wasn’t supported by the Fed.

There is a culture in the Bitcoin community these days of “low (i.e., long-term) time preference,” which fundamentally counters the Ponzi scheme-minded speculators that need quick gains all of the time. High (short-term) time preference fuels the perpetual “passive income” lie that newbies always fall for. In contrast, the “modest” two-year gain of 331% in bitcoin is more than enough for HODLers that have been buying since before the feeding frenzy of the past two years. Long-term time preference works for bitcoin because its fundamental value proposition has held true since its inception, and it will continue to hold true in the future for those who wait. Those who cannot wait are washed out by the market over a long enough time period in any market, just like we have seen with the 0% net gain for novice retail traders that pull in and out too much. The gains caused by hype, stimulus and cultural madness were fleeting, but the gains in Bitcoin utility and adoption have been real all along.

Detractors have been criticizing Bitcoin for needing meme-stock speculators to make it work, but now that the meme-stock speculators are gone, the detractors are criticizing Bitcoin for the speculators not being there. This is simply illogical, and proof that Bitcoin is not actually a Ponzi scheme. The same can not be said for other cryptocurrencies. Ponzi schemes by definition cannot exist for decades and the honesty in current bitcoin price attests to the honesty of its fundamental value proposition. Yes, it goes down sometimes. This is an indicator of health and transparency. Something that just goes up and up and up forever? That’s a Ponzi scheme and the bottom will always fall out eventually.

No one’s singing “Pump It Up” anymore, and despite how fun and euphoric the 2021 rally was for a while, the space is really better off without the memers around. It’s time for a more grown-up culture of development and adoption around Bitcoin, and time for a more grown-up price conversation as well.

This is a guest post by Nico Cooper. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.

Filed Under: Bitcoin Magazine, Bitcoin Price, English, HODL, Hodlers, hyperbitcoinization, Markets, Opinion, Ponzi Scheme

2022 Bitcoin Obituaries List Outpaces First 3 Years, Schiff Says Its ‘Highly Likely Bitcoin Will Crash Below $10K’

09/05/2022 by Idelto Editor

2022 Bitcoin Obituaries List Outpaces First 3 Years, Schiff Says Its ‘Highly Likely Bitcoin Will Crash Below $10K'

While bitcoin’s price has dropped to levels not seen since January 2022, a number of detractors think bitcoin is on its death bed. Data stemming from the Bitcoin Obituaries list shows the leading crypto has died seven times in 2022, outpacing the first three years of obituaries by year written by bitcoin haters. The last obituary written about bitcoin, opined by the financial journalist, John Plender, claims the leading crypto asset follows the “greater fools” scenario.

Bitcoin Obituaries List in 2022 Surpasses First 3 Years of So-Called Deaths by Year

During the course of Bitcoin’s 13 years, the leading crypto asset has been deemed ‘dead’ or ‘extremely close to death’ by many journalists, economists, analysts, and financial experts. In fact, these types of opinions happen so much, that the team at 99bitcoins.com curated a list called the “Bitcoin Obituaries.” The data from the website shows bitcoin (BTC) has died 447 times since the list was started in 2010. That particular opinion that said bitcoin was dead was written on December 15, 2010 in a post called: “Why bitcoin can’t be a currency.”

As the years continued, bitcoin obituaries were published more often, and during the bull run of 2017, there was 124 bitcoin obituaries added to the web portal. The following year in 2018, bitcoin died 93 times, and in 2019, only 41 deaths were recorded. 2020 saw a smaller number of bitcoin obituaries, as the year only saw 14 listed on the website. In 2021, bitcoin obituaries picked up the pace again, and the leading crypto asset saw 47 obituaries written about its so-called demise.

In 2022, there’s only been seven bitcoin obituaries recorded, but the year is not over and it has outpaced 2010, 2011, and 2012 by the number of yearly obituaries so far. Bitcoin’s price has experienced a downturn in recent weeks, and it’s quite possible even more bitcoin obituaries will be added this year. The last obituary listed on 99bitcoins.com was written by the British financial journalist and columnist for the Financial Times (FT), John Plender. The post listed as: “Bitcoin Will Run Out of Greater Fools,” quotes Plender’s statements from his April editorial. While Plender does not believe in bitcoin, the FT columnist does think blockchain is a powerful technology.

“There can be no denying the astonishing power of blockchain technology, which is here to last,” Plender writes in his FT editorial. “Yet bitcoin is intangible, risky and incomprehensible to most human beings. While it is increasingly gaining acceptance among professional investors, its performance this year makes it hard to believe it can topple gold from its position as the ultimate bolt hole for frightened money.” The financial journalist adds:

As for the important cultural dimension of the argument, bitcoin, frankincense and myrrh lacks a certain ring. The supply of greater fools will in due course run out.

Gold Bug Peter Schiff Says Sub-$10K Bitcoin Prices Are ‘Highly Likely,’ Schiff’s Recent Poll Shows 54% of 37,000 People Say They Will Still HODL

While bitcoin is not dead, the cryptocurrency still has many detractors like the Iranian-American economist Nouriel Roubini, and the economist and gold bug Peter Schiff. The gold bug Schiff believes bitcoin and other crypto assets will keep falling in value. Schiff recently held a poll on Twitter after he said: “If bitcoin breaks decisively below $30K it seems highly likely that it will crash below $10K.” Schiff then added that this means any BTC holder has an important decision to make. “What will you do?” Schiff asked. “You had better decide now so you don’t panic and make a rash spur-of-the-moment decision.”

 

Schiff then left a poll in his Twitter thread that gives people some choices on what they would do. Choice one was “it won’t break below $30K,” which received 19.6% of the 37,000 votes. 54.5% said they would “HODL,” and 15.5% said they would sell and buy lower. Roughly 10.4% of the surveyed participants said they would sell bitcoin and would not rebuy. In Schiff’s eyes bitcoin will always be dead, and he wholeheartedly believes the precious metal gold will continue to soar.

“The 6% weekend drop in bitcoin was in fact a leading indicator of weakness in other risk assets as stock market futures are trading down 1%,” Schiff said on Monday. “Once investors figure out that Fed rate hikes will result in recession but not a significant reduction in inflation, gold will soar,” the bitcoin detractor added.

What do you think about the Bitcoin Obituaries list hosted on 99bitcoins.com and John Plender’s opinion? What do you think about Peter Schiff’s opinion about bitcoin and his recent Twitter poll? Let us know what you think about this subject in the comments section below.

Filed Under: 2017, 2020, 99bitcoins.com, Analysts, Bitcoin, Bitcoin (BTC), bitcoin deaths, bitcoin is dead, Bitcoin Obituaries, BTC, BTC dead, BTC deaths, dead, Dead bitcoin, dead BTC, deaths, Economist, economists, English, Eulogy, Featured, Gold Bug, Journalists, Luminaries, News Bitcoin, Nouriel Roubini, Obituaries, obituary, Peter Schiff, Ponzi Scheme, Pundits, Schiff $10K, Schiff Poll, single-digit deaths, Skeptics

Crypto Pyramid Busted in Russia, Losses Exceed $10 Million

24/03/2022 by Idelto Editor

Crypto Pyramid Busted in Russia, Losses Exceed $10 Million

Russian law enforcement agencies have gone after the organizers of a large crypto pyramid which has been promising extraordinarily high returns. The Ponzi scheme is being unraveled after a similar project defrauded thousands of investors in Russia, the region, and far beyond.

Police Find Crypto Pyramid Organizers in Dagestan, Russia

Officers from the Federal Security Service (FSB) and the Ministry of Internal Affairs in the Russian republic of Dagestan have identified persons suspected of organizing a major financial pyramid offering victims profits of up to 500% per year on their investments in digital assets.

According to sources quoted by the Russian business daily Kommersant, the suspects are representatives of the Yusra Global project, Forklog reported. Besides Dagestan, the fraudulent entity had established offices in other Russian regions, Kazakhstan in Central Asia, and Turkey.

The publication reveals that the authorities have detained four people in January, all Russian citizens, who are believed to be behind the Ponzi scheme. They were initially placed under arrest for a period of two months. The defendants may face up to ten years in prison on top of hefty fines.

The perpetrators of the fraud were inflating quotes of values of digital assets and paid out dividends using the funds invested by new participants in the pyramid, the report detailed. They distributed the rest of the money amongst themselves and purchased real estate.

Preliminary estimates suggest the victims’ losses amount to 1 billion rubles, or more than $10 million according to current exchange rates at the time of writing, the Russian newspaper revealed.

The news about the investigation into Yusra Global comes after last year, when Russian authorities busted arguably the country’s largest financial scam since the notorious MMM pyramid in the 1990s.

Finiko, also a Ponzi scheme exploiting the rising popularity of cryptocurrencies, is responsible for the loss of up to $4 billion in total. Its founder Kirill Doronin — a social media influencer linked to other scams in the past — and a number of his accomplices were arrested.

Citizens of Russia, Ukraine, and other countries in the former-Soviet space, EU member states, and the U.S. are among the people who sent 800,000 separate crypto deposits to the phantom entity. The pyramid, which was based in another Russian republic, Tatarstan, received over $1.5 billion worth of bitcoin in less than two years, according to Chainalysis.

Do you expect Russian authorities to target other financial pyramids related to crypto investments? Tell us in the comments section below.

Filed Under: arrests, crypto, crypto pyramid, Cryptocurrencies, cryptocurrency, Dagestan, detainees, English, financial pyramid, Finiko, Fraud, News, News Bitcoin, organizers, Ponzi Scheme, Pyramid, Russia, russian, tatarstan, Yusra Global

Bitcoin Attacks The Ultimate Ponzi Scheme

08/01/2022 by Idelto Editor

Centrally managed currencies are similar to Ponzi schemes, and require increasingly dystopian measures to stay afloat.

Bitcoin Attacks The Ultimate Ponzi Scheme

Who Is Running The Ultimate Ponzi Scheme, And How Do We Stop It?

The Ponzi scheme is a simple concept.

“A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money. Instead, they use it to pay those who invested earlier and may keep some for themselves.

“With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. When it becomes hard to recruit new investors, or when large numbers of existing investors cash out, these schemes tend to collapse.”

If we replace investors with lenders, we can look at a similar type of Ponzi. Let’s look at an example: Let’s say Acme Corp takes out a $1 million loan for one year against their $10 million in assets. They spend that $1 million, but they still need to pay back the bank $1 million plus 5% interest. So, Acme takes out another loan for $2 million plus, pays back the first loan, and keeps another $1 million to spend in the second year. In the third year, Acme owes that $2 million plus with interest, so they take out $3 million, plus enough to cover last year’s loan payment, with $1 million to spend in the third year.

As long as a lender is still willing to lend to Acme, this can technically go on as long as Acme’s interest rate is lower than the growth rate of their assets. Acme can even use borrowed money to buy more assets, further fueling this machine.

As you can see from the chart, the downside is that each time Acme takes out a new loan, their total debt load grows and approaches the total value of their assets. If Acme’s debt load ever exceeds the value of Acme’s assets, Acme’s creditors will demand their money back and Acme’s value — their entire existence and all investments in them — will go to zero overnight. This could happen because of interest rates rising or asset values falling, even if the latter is over a short time during some calamity.

For Acme’s infinite money machine to keep operating steadily, the interest rate on loans must be lower than the growth rate of assets. If this continues, old debts can be paid with new loans. All the while, however, Acme faces risk from a downturn. If asset values go below Acme’s debt burden, creditors will come calling — and Acme better have a pretty good explanation to keep creditors from pulling out and leaving Acme penniless.

The longer Acme is able to run the infinite money machine, the higher the nominal value of Acme and its assets goes, and the harder they and their investors fall when a sudden drawdown triggers a margin call from creditors. For a real world example, see one of China’s biggest companies, Evergrande:

From the article in the Financial Times: “‘There is no way we can repay so many creditors with our limited resources,’ said an Evergrande executive, who asked not to be identified. ‘We will let judges decide who gets paid and how much.’”

Seems like a dangerous game to play, but Acme is just one company. Can we look at this type of Ponzi behavior across an entire economy?

The Global Infinite Money Machine

The Acme example illustrates how the infinite money machine Ponzi works and gives us a way to spot it from the outside: debt-to-asset ratios.

If the world were one company, gross domestic product (GDP) would be similar to the “assets” of that company — the sum of all its capital and productive activities. Thanks to the International Monetary Fund (IMF), we can check on the state of our global debt-to-GDP ratio.

Source: IMF DataMapper.

Just like Acme, the debt-to-GDP ratio is high around the world — sometimes even above 100%! This means the entire global economy is exposed to massive systemic risk, and the situation is only getting worse.

Why are we seeing systemic risk increasing, and what can we do about it?

To answer these questions, we need to start with interest rates.

The Interest Rate Gods

An interest rate can be thought of as the time value of money — the amount a borrower pays to borrow money for a set period of time. This is similar to any other rental service, like a car rental; the total loaned amount is the car, and the interest rate is a way to express the amount you pay to rent the car. Just like any other good or service, the competition of service providers over customers and repeated transactions may lead to a “market price” for a loan, just like prices for similar services across different car rental companies tend to converge.

In our modern economy, however, we have endowed interest rates with a divine status, allowing central bankers to set these rates instead of participants in a free market. Central banks like the Federal Reserve change rates using their monopoly on the creation and destruction of reserve money, which they use to buy and sell assets within the commercial banking system. These actions are convoluted, but their stated intent is to influence all other interest rates in the economy to move up or down.

Central banks thus control a key lever of the infinite money machine Ponzi: interest rates.

What are they doing with this lever? Lowering interest rates steadily.

Source: VoxEU.

As we remember from the Acme example, lower interest rates makes infinite money machine Ponzis easier to run, which means more companies and the entire global economy face systemic risk. However, an infinite money machine also requires asset values to steadily rise faster than interest rates with only contained downturns.

What’s going on with assets?

The Everything Rally

Asset values, on paper, are skyrocketing. Looks fantastic, until you consider that this means lots of room for infinite money machine Ponzis and the systemic risk that comes with them.

Major stock indices in dollar terms (Source: Preston Pysh).

The story behind asset values reveals the root of this meteoric rise. As central bankers and governments work together to lower interest rates and make credit more available, they are incentivizing savers to move their savings out of low-risk assets — like savings accounts — and into higher risk assets — like stocks of companies.

Over time, this makes the S&P 500 and similar indices into the new savings accounts. Younger generations know this, and as a result, we see record-high participation in the stock market through apps like Robinhood. Passive investing strategies — like ETFs — see record popularity as well.

Savers who buy a company stock today are widening the divide between interest rates and asset value growth for that company, making it easier for them to start and sustain an infinite money machine. If we look at the whole American economy, we can see how interest rates and asset values are diverging, opening the opportunity for individuals and businesses to infinitely borrow against their assets.

So interest rates are held low, and as a result, asset values are pushed higher, solving two of the three pieces of our infinite money machine. However, volatility still represents a strong check on the infinite money machine, given that a sufficient drawdown can end the whole ruse in an instant. How come the party isn’t over yet?

Eliminating Downturns

A downturn in asset values endangers the debt-fueled party of infinite money machines. This makes downturns a deterrent to even embarking on an infinite money machine Ponzi. Unfortunately, that deterrent is now but a relic of history due to the readiness of central banks and governments to intervene in downturns.

When downturns arrive, central banks and governments work together to use government debt and newly printed cash to keep asset values afloat. “Ensuring solvency” of a bank, for instance, means keeping its debt burden from exceeding its asset value — keeping its infinite money machine in operation.

When debts exceed asset values for a company, that company’s value quickly goes to zero – unless they get a bailout (Source: Wall Street Journal).

Banks are often the first beneficiaries of government bailouts but not the last. With each crisis, central banks and governments are injecting more money even further across the economy.

So, low interest rates drive high growth in asset prices, widening the fertile ground on which infinite money machine Ponzis grow and develop. Downturns usually cut these Ponzis down, yet we see governments stepping in to bail them out with yet more credit. This, in turn, feeds asset prices, and on and on the cycle goes.

Can we ask our elected officials to simply stop pushing down interest rates, bailing out those who took on too much debt, and instead let downturns run their course?

Let’s Just Stop

If central banks and governments stopped making credit easier and easier to get through lower interest rates and debt monetization, we could put an end to this Ponzi scheme behavior and get back to an economy where we sell useful goods and services to each other.

Where’s the problem?

Central banks and governments cannot stop taking on debt and printing money, because our currencies themselves are a key part of a massive infinite money machine Ponzi.

The U.S. dollar and all other major currencies in circulation today are fiat currencies, with central banks and governments able to work together to create more units of the currency. In practice, new units of currency are created through loans by central banks to banks or the government, and by banks to people and businesses. The currencies we use every day are actually debt held by people, businesses and governments.

The source of this infinite money machine is central banking. A corporation or individual needs to show a lender that they are creditworthy, but the central bank is a special type of lender. This lender bears no cost to lend their currency, so they can lend to anyone, anytime, at any rate. Governments utilize this special lender as their literal infinite money machine. And they even admit it’s an infinite money machine!

Central banks and their money printers enable the illusion of both lower interest rates and GDP growth. When central banks push interest rates down, they are injecting new currency into the economy. This currency circulates and pushes prices for everything up, all at different rates and times. As a result, GDP floats upward.

Can we not adjust GDP for this inflation? Sadly, no. No economist or supercomputer is capable of parsing the complexity of price movements in markets to say what percentage of a rise in GDP came from actual productivity versus simply more currency units floating around, pushing up prices. If someone could, they’d be the richest person in the world overnight by perfectly trading the financial markets.

However, a central bank and its fiat currency have the same Achilles heel as a Ponzi scheme:

“With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. When it becomes hard to recruit new investors, or when large numbers of existing investors cash out, these schemes tend to collapse.”

If central banks and governments stop printing money, or if demand for their debt or currency falls, the entire ruse will collapse.

How does a government ensure demand for their debt or currency?

Dictating Demand to Keep the Ponzi Going

A corporation or individual who lets their debts surpass their assets must peaceably file for bankruptcy and unwind the whole folly. A government would go down just the same once people began to realize the inanity of the fiat currency system. However, we have given governments our blessing to use force, and in many cases given up our own capability as citizens to resist that force.

To keep their Ponzi currency going when people become aware of it, governments must restrict freedoms or use violence.

Legal tender laws and taxation are one way in which governments restrict freedoms and employ violence in order to prop up their currency system. By demanding taxes be paid in their own currency, governments are able to prop up demand for citizens to acquire their currency and then take that currency out of circulation. Proponents of modern monetary theory are very direct about this, believing that the purpose of taxation is to control inflation by sucking liquidity out of the system. The backstop to ensure these strategies work? That government’s police will gladly lock you up if you do not comply.

Imagine you decided not to continue lending to a company because you didn’t think they were solvent, and an employee of that company handcuffed you and threw you in a cell. Who would be in the wrong here?

Governments may also employ military force on the international stage to tackle threats to its Ponzi scheme. The U.S. government is particularly adept at using military power — or simply a projection of it — to defend the U.S. dollar system from threats. When other nations challenge demand for dollars on the international market, say for use in oil markets, the missiles start flying. This is the truth behind the meme below.

Source.

As the government goes deeper into debt, it will need to take more drastic measures to ensure the fiat currency Ponzi continues. That will mean more inflation, higher taxation, stricter controls, and strategic use of the government’s backstop of violence. They will increase taxes, seize assets, tighten surveillance and even “debiting FedAccounts” when inflation inevitably accelerates. All the while, the severity of the eventual collapse will grow.

If the government won’t help us get out of a system that is hurting us all, what can we do by ourselves?

Ending The Ponzi Ourselves

Thankfully, we, collectively, as citizens of the Earth, can fix this problem — not through votes or UN resolutions but through individual actions to cease participating in the machine governments have built around us.

We are already bombarded by messages that it is the greedy rich and capitalism itself which is to blame for our societal ills, but now we know they are only following a playbook and strategy enabled and encouraged by a government-led Ponzi scheme.

Source: CNN.

Ironically, these messages drive people to hand more power to governments, who are seen as the only answer to controlling the excesses of the private sector. The result is exacerbation of the problem, not resolution, as government-centric monetary systems are the root of those problems.

Thankfully, defunding the fiat currency Ponzis and ridding our world of their catastrophic systemic risks is already in progress. Day by day, individuals are opting out of a broken financial system and into a new one, out of government reach and fixed in supply: Bitcoin.

The existence and growth of the Bitcoin network represents a challenge to a system which must exert more controls and increase systemic risks in order to survive. That system would have us work harder for less just to keep the Ponzi scheme ticking. Each person who chooses to hold bitcoin instead of assets which governments can seize or devalue is doing their part to dismantle that scheme.

Will you be one of them? 

This is a guest post by Captain Sidd. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Filed Under: Bitcoin Magazine, business, Centralization, English, inflation, Money Printing, Ponzi Scheme

CEO of Mirror Trading International Bitcoin Ponzi Scheme Arrested in Brazil

08/01/2022 by Idelto Editor

Johann Steynberg, the wanted CEO of Mirror Trading International was recently arrested by Brazilian law enforcement after he was caught using a fake document. The arrest, which took place in the country’s Goiás province, was carried out by the Brazilian military police.

Fake IDs, Laptops, and Credit Cards Seized

Johann Steynberg, the CEO of Mirror Trading International (MTI), a bitcoin Ponzi scheme, was recently arrested by Brazilian law enforcement after he was caught using a false document, reports from the South American country have said. Following the arrest, credit cards, laptops, and fake identification were also seized.

As per several Portuguese language reports, Steynberg, who is on Interpol’s wanted list, was apprehended in the Goiás province by members of an elite unit within Brazil’s military police.

In a statement confirming the arrest, the Brazilian military police also shared details of the steps taken before the decision to capture Steynberg was made. The statement explains:

After an intense work of identification and follow-up, and with the help of information passed on by the Federal Police, it was possible to identify and approach the suspect, who presented a false document at the time of the approach.

Steynberg Fined for Using False Document

On top of being arrested for his role as the key mastermind behind the MTI bitcoin Ponzi scheme, the Brazilian military police said Steynberg must also pay a fine relating to his use of a false document.

As previously reported by Bitcoin.com News, Steynberg disappeared in late December 2020 when reports emerged that several MTI investors were unable to withdraw their funds. Shortly after his disappearance, a South African court ruled that MTI had to be placed under provisional liquidation.

However, since then, other masterminds of MTI — which was named the biggest bitcoin scam in 2020 — have waged a battle to stall the process of liquidating the collapsed company. Meanwhile, a court ruling on a petition that seeks to have MTI declared an illegal business is still pending.

What are your thoughts on this story? Tell us what you think in the comments section below.

Filed Under: English, Johann Steynberg, Mirror Trading International (MTI), MTI bitcoin scam, MTI bitcoins, MTI liquidation, News Bitcoin, Ponzi Scheme, Regulation

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