[alehul]

Rather than Ponzi scheme, I'd classify the investors as participating in a Pump & Dump.

A Ponzi scheme is when it's an investment vehicle (i.e. hedge fund) that provides returns to older investors through capital acquired from newer investors. In this case, by contrast, it's overhyping (to the point of fraud) a publicly traded security in hopes of rallying some investors to buy in, which increases the price, further validating the potential and convincing more investors to buy in.

Merely participating through buying in a Pump & Dump process is completely legal; it only becomes illegal if you're the party using fraudulent information to increase the value of the security.

[shkkmo]

> A Ponzi scheme is when it's an investment vehicle (i.e. hedge fund) that provides returns to older investors through capital acquired from newer investors.

Isn't that exactly what they did?

From the Article:

> Pincoin was particularly unique in that it offered bonuses for bringing other people into the program, a tactic that might sound familiar. The scammers paid out in cash until January when they began sending iFan tokens.

Pump and Dumps make their money by selling the asset once it's price has been inflated. In this case, the money was made throughout the whole ICO by fraudulently selling a security.

[alehul]

Offering bonuses for bringing other people into the program is a Pyramid Scheme tactic. Ponzi is specifically in cases where there's a portfolio manager or something controlling the entire operation and allocating returns to early investors through distributing the capital of the new investors.

[Buge]

That's what Pincoin did

>The company first ran the Pincoin ICO, promising constant returns to investors

>Investors have been told that they would enjoy a profit rate of 48 percent a month from their initial investment, and recoup all investments after four months.

[alehul]

Were they actually given that profit rate from the Pincoin team, or promised that the coin's value would increase?

This really seems like a mess of illegality either way haha.

[shkkmo]

From the article:

> Pincoin was particularly unique in that it offered bonuses for bringing other people into the program, a tactic that might sound familiar. The scammers paid out in cash until January when they began sending iFan tokens. Then, last month, the team vacated their fancy offices leaving only an oddly well-made – if incomplete – website in its wake.