On December 28th, Nestor Nunez, a 64-year-old Spanish citizen, was arrested in Spain for his involvement in the Forcount Ponzi scheme. Ramon Perez, a 40-year-old American citizen, turned himself in to authorities in Orlando on Friday. The Department of Justice (DOJ) is currently seeking the extradition of Nunez to the United States to face charges.
The Forcount Ponzi scheme, which operated from 2017 to 2021, defrauded investors out of a total of $8.4 million through a network of promoters who convinced individuals to invest in the platform. Investors were promised high returns based on profit sharing from non-existent mining and trading activities.
The arrests of Nunez and Perez come as part of an ongoing investigation into the fraudulent cryptocurrency scheme. It is not yet known how many individuals were affected by the scam or how much money each victim lost.
Cryptocurrency Ponzi Schemes on the Rise
The Forcount Ponzi scheme is just one of many fraudulent cryptocurrency schemes that have emerged in recent years. As the popularity and value of cryptocurrencies have increased, so too has the number of scammers seeking to take advantage of unsuspecting investors.
Ponzi schemes, named after Charles Ponzi who became infamous for using the technique in the early 20th century, involve promising investors high returns on their investments while using the money of new investors to pay the returns of earlier investors. The scheme relies on a constant influx of new investors to keep the payments going, eventually collapsing when the number of new investors dries up.
It is important for individuals to thoroughly research any investment opportunity and be wary of too-good-to-be-true promises of high returns. It is also crucial to be aware of the warning signs of a Ponzi scheme, such as the promise of guaranteed returns, the use of unlicensed sellers, and a lack of transparency in the investment process.
Protecting Yourself from Cryptocurrency Scams
There are steps that individuals can take to protect themselves from falling victim to a cryptocurrency scam. Some tips include:
- Only invest what you can afford to lose: Cryptocurrencies are a high-risk, high-reward asset class, and it is important to only invest money that you can afford to lose.
- Research the company and the individuals behind it: Be sure to thoroughly research any company or individual that you are considering investing with, including checking their credentials and reputation.
- Be wary of unsolicited investment opportunities: If you receive an unsolicited offer to invest in a cryptocurrency or other investment opportunity, be extra cautious. It is often a red flag if you are approached out of the blue with an investment opportunity.
- Don’t rush into decisions: Take your time to carefully consider any investment opportunity and don’t feel pressured to make a decision on the spot.
- Seek out reputable sources of information: Look for information from trusted sources, such as financial regulatory bodies or well-known industry publications.
By following these tips and being aware of the warning signs of a cryptocurrency scam, individuals can protect themselves from falling victim to fraud.