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by hsbauauvhabzb 1256 days ago
Isn’t this normally called a Ponzi scheme?
2 comments

No, this isn't close to a Ponzi scheme. A Ponzi scheme is fraud where profits are paid to earlier investors with funds from more recent investors.
you mean simulated or pretend profits
The word profit refers to the profit of the earlier investors.
when fraud and bankruptcy courts unravel an investment scheme, they don't "claw back" distributed profits, but they do demand the return of the ponzi's payments that are meant to appear to be profits but were simply purloined from the earlier investors, is what I was referring to. The courts do not consider those to be profits.