Minerfund.biz Review Miner Fund HYIP Will Leave You In Tears

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High-Yield Investment Program (HYIP)

What Is a High-Yield Investment Program?

A high-yield investment program (HYIP) is a fraudulent investment scheme that purports to deliver extraordinarily high returns on investment. High-yield investment schemes often advertise yields of more than 100% per year in order to lure in victims. In reality, these high-yield investment programs are Ponzi schemes, and the organizers aim to steal the money invested. In a Ponzi scheme, money from new investors is taken to pay returns to established investors. Money is not invested and no actual underlying returns are earned; new money is just used to pay people who entered the scam earlier than they did.

Though this brand of Ponzi scheme has existed since the early 20 th century, the proliferation of digital communications technology has made it much easier for con artists to operate such scams. Usually, an operator will create a website to lure in unsuspecting investors, promising very high returns but remaining vague about the underlying management of the investment fund, how the money is to be invested, or where the fund is located. These funds typically involve the alleged trading or issuance of “prime” bank financial instruments and may include references to prime European or prime world bank instruments. For this reason, this scam is also known as the “prime bank scam.”

Digital communications technology has made HYIPs and other scams easier.

How a High-Yield Investment Program (HYIP) Works

High-yield investment programs (HYIPs) are investment scams that promise unreasonably high returns and often just use new investors’ money to pay off older investors. Of course, this is not to be confused with a legitimate high-yield bond investment, which offers higher than investment-grade interest rates. HYIP operators will typically use social media, including Facebook, Twitter, or YouTube, to appeal to victims and create the illusion of social consensus surrounding the legitimacy of these programs.

The SEC advises that there are several warning signs that investors can use to help avoid being victimized by high-yield investment program scams. These include excessive guaranteed returns, fictitious financial instruments, extreme secrecy, claims that the investments are an exclusive opportunity, and inordinate complexity surrounding the investments. Perpetrators of high-yield investment programs use secrecy and a lack of transaction transparency to hide the fact that there are no legitimate underlying investments. The best weapon against getting sucked into a high-yield investment program is to ask a lot of questions and use common sense. If an investment’s return sounds too good to be true, it probably is.

High-Yield Investment Program (HYIP) Example

An example of an HYIP was Zeek Rewards, run by Paul Burks and shut down by the SEC in August 2020. Zeek Rewards offered investors the opportunity to share in the profits of a penny auction website, Zeekler, at returns of 1.5% a day. Investors were encouraged to let their returns compound and to increase their returns by recruiting new members. Investors were required to pay a monthly subscription fee of $10 to $99 and make an initial investment of up to $10,000. The SEC found that about 99% of the funds disbursed were paid out of the pockets of new investors and that Zeek Rewards was a $600 million Ponzi scheme. Burks was fined $4 million and sentenced to 14 years, 8 months in prison.

Informed Investor Advisory: HYIPs

Are you an informed investor?

Don’t Get Roped In

What are HYIPs?

Have you ever seen an ad on the Internet or a posting on a social media site promising too-good-to-be-true rates of return in short periods of time? Then you may have encountered an advertisement for a high-yield investment program, sometimes referred to as an HYIP.

HYIPs are Ponzi schemes sold by unlicensed individuals. In the past, con artists relied on word of mouth to lure investors into these investments. Now they rely on the Internet and social media buzz to quickly popularize their schemes before the fraud is discovered.

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The most notable characteristics of HYIPs are the promise of very high returns at little or no risk to the investor and the paying of referral fees to current investors for bringing in new investors. In this way, HYIPs blend elements of both Ponzi and traditional pyramid schemes into one scheme that can spread faster than ever before.

In one recent HYIP, the company offered memberships that purported to provide investors with up to a 60 percent profit in 100 days. In less than a year, the company took in more than $10 million from investors. The company relied on Biblical themes and the promise of high profits to lure unsuspecting investors. All investors’ proceeds were lost.

How to Recognized an HYIP Scam

  • The promise of high daily, weekly or monthly returns.
  • An offer from the company to pay “referral fees” to investors for bringing in additional investors.
  • The use of social media to spread the word and praise the program.
  • The promoter provides very few details about who runs the company and how profits are generated.
  • The promoter may require that the investor open an e-currency account to invest. E-currency accounts are not licensed as a money transmitter. (See NASAA’s Virtual Currency Advisory.)

How to Protect Yourself

  • Be sure to check with your securities regulator before investing. Most of these schemes are unregistered investments. Also, these schemes may involve international operations, which means it may be very hard, if not impossible, to get your money back.
  • Do not blindly trust an investment just because your friends or family are involved or if it relates to your religious affiliation.
  • Ask questions about how the returns will be made and who the company officers are. If these questions cannot be answered to your satisfaction, then do not invest.
  • Do not trust the investment just because you receive early returns. Remember that is how they rope you in and get you to recruit your friends.
  • Be wary of the “get in early and get out fast” recommendation. Many HYIPs advertise that one way to make profits fast is to invest early then get out early, but you never really know when the scheme is going to stop.

The Bottom Line

It pays to do your homework before you invest in any investment opportunity. If you have any questions about high-yield investment programs, contact your state or provincial securities regulator. Contact information is available on the website of the North American Securities Administrators Association, here.

Canadian Provincial Regulator Exposes HYIP Crypto Scam

Canadian regulators have been vigilant following the collapse of a Toronto hedge fund that promoted a $106 million ICO.

The Manitoba Securities Commission (MSC), a Canadian provincial regulator, has warned the public against investing with two affiliated cryptocurrency firms operating in Switzerland and Denmark.

This time, the firms under the spotlight of MSC called Jbcapitals and Halifax & Associates, which offer clients a range of financial services. A senior investigator with the MSC explains that the regulator received complaints from Manitobans targeted by Jbcapitals, and his investigation turned up numerous inconsistencies.

Both firms’ offerings raise a number of red flags characteristic of investment scams. Specifically, they claim to invest in Bitcoin/cryptocurrency markets on behalf of their clients with an “85% success rate,” adding that their profits will be quickly realized with no risk. These claims carry the hallmarks of investment fraud. They also claim they’ve been in business for a while, but some investigative work on the regulator’s side suggests they’ve been around less than one year.

Canada brings crypto under securities laws

Canadian regulators have been vigilant recently following the collapse of the Toronto-based hedge fund that promoted Blockchain Terminal (BCT) initial coin offering (ICO).

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The most controversial defendant is Boaz Manor, a convicted Canadian hedge fund fraudster who served jail time. In 2020, Manor accepted a lifetime ban on operating within the securities industry following his conviction in the $106 million scam. He was sentenced to four years in prison.

Arguably one of the most audacious ICO scams in recent years, Boaz claimed that he onboarded 20 hedge funds to test out his professional trading service. In fact, he’s never seen the product in action, even though it sent a prototype to a dozen funds, but none of them used or paid for it.

On the trading front, the chief regulatory body in Canada has proposed a regulatory framework that provides clarity for derivatives activities, including cryptocurrency, forex, and CFDs products. Among other things, all highly leveraged products offered to retail clients must be approved in advance by IIROC. Brokers must obtain prior approval for their leveraged products either when releasing new instruments or introducing any changes to the current offerings.

The regulator also said its updated rules would ‘harmonize’ IIROC requirements with product approval requirements introduced in Europe by ESMA, which banned offering binary options and restricted leverage on CFDs.

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