Unlicensed Internet Financial Services?
All day long I surf the Internet reading web sites, scanning blogs and sorting news feeds. The targets of my quest are usually found in the digital currency/financial services arena. I love discovering new methods of payment and ways to transfer assets using the Internet.
I prefer the new legal and ethical ways to do business online without a credit card or bank, but that is not always what I find. While I don’t like scams, fraud or criminal behavior its hard to keep my head above water and not drown in this ocean of scams I find each day.
During my web travels its seems the digital currency ‘industry’ offers the world’s finest selection of ‘grey area’ businesses. Online businesses that use digital currency also seems to be permanently linked to:
- Unlicensed and unregulated ‘investment’ companies soliciting [stealing] funds across multiple jurisdictions
- Businesses labeled ‘banks’ that are not directly affiliated with ANY part of the banking industry and not licensed anywhere except in some delusional world of ‘cyberspace’
- Investment companies [ponzi schemes] advertising ridiculous high returns
- Advertising or surfing web sites offering ‘high returns’ for an investment and a few minutes of viewing ads each day
- Payment processing companies cash flowing national currencies into digital accounts on behalf of the investment scams
- …..the list of scams in my PC world seems endless and very profitable
In my Internet world, this infinite online ‘grey area’, seems to encompass everything from lotteries to high yield/auto surf investments and all the way up to sales of illegal drug.
Yes, last month we uncovered multiple ‘work from home moms’ advertising the sale of pot on their web sites. Of course this naturally generated a two days discussion on whether it was legal or ethical to enable their cash flow by allowing the use of digital currency since pot is legal in at least a few jurisdictions around the globe. (definitely NOT my point of view)
Digital currency while supporting thousands of legitimate operators, seems to offer some distinct advantages that are often misused or exploited by these online scheme operators. The largest group I find exploiting the ‘grey area’ is ‘HYIPs‘ or High Yield Investment Programs [ponzi scams]. They operate with impunity & no regard for any laws or even a self regulated hope of operating within the ’spirit’ of any law. Money, money, money…. that’s all they want.
This High Yield industry cannot operate without some help from a separate cottage industry which directly supports these irregular businesses. If they are on the Internet then someone has to register their domain, host them, provide DDOS protection, email and most importantly process their money transactions. Ultimately each day, I not only see the scams, but I see the ‘respectable’ businesses that deliver services to the scams such as ‘anon web hosting’, anonymous domain registrations, domains by proxy, online money exchanges, payment processors, secure-private-disposable-anonymous-offshore email, proxy servers (JAP, Tor etc), anonymous VPNs and a host of other ancillary services that feed directly off of the ‘bigger fish’ investment financial scams. I’ve been able to watch these respectable web businesses not only grow but flourish across the Internet. This is definitely flawed logic, but here is how the industry sees it….as long as people are willing to throw their money away, why shouldn’t I get rich in the process? Right?
Without a doubt, the world of unlicensed Internet financial services and investments has to be one of the more profitable areas of the Internet today. I’m not surprised that every household in the Americas and Canada does not already operate their own ‘High Yield Investment Program’ or some version of one. Why not? Since these so called investment’s are not labeled online gambling, which according to the gospel of the United States has recently been identified as the eighth deadly sin, why doesn’t everyone have one or two of them generating profits?
Apparently HYIPs (ponzi schemes) are not recognized by anyone important as illegal because NO ONE ever gets arrested or jailed while operating them. Regulations…Taxes…Victims…What are these words? No one will prosecute you, unless you get too big. Once you get too successful in the ponzi world, what legal bank operator could try and ignore $100 or $200 million flowing through a local account under the guise of a Internet advertising company. However, keeping it small, a million euro, or say $800,000 in USD, who is going to even notice?
Are you unsure of how to advertise your new business? Don’t worry about a thing, both Google and Yahoo will support your endeavor. With Google Adwords and Yahoo Advertising so you will never go a day without a new audience of greedy high yield suckers. Apparently, neither of these Internet giants cares what they are advertising as long as they too get paid.
Having watched all of this action for many years now, I feel I’m in a rather unique position to write and discuss much of what I have seen. In the month of August, readers will get an inside scoop from my point of view on how these scam investment operations are flourishing, stealing money and laughing at law enforcement as they slide off into the night with their profits. It’s an embarrassment for me to witness this activity each day. Year after year the HYIP lies, theft, scams. I can’t seem to get the water hot enough to shower this stuff away. Frankly, I’m sort of fed up with it, so now I’ll pass it on to you readers and perhaps I can get your input.
During August, I’m going to show you the operators which prohibit all such ‘investments’ and also the payment processors and businesses that get right in bed with the crooks.
Stay tuned here at DigitalMoneyWorld for a month long rant discussion detailing Unlicensed Internet Financial Services and the companies that support [facilitate] their businesses.
I’ll be here sharing my views as well ;)
Mark…
Do you mean that ALL HYIPS are SCAMM ?
There is no hope at all ?
ALL, unless you can show me one that is a legal or legit High Yield?
Its not possible to pay that high of a yield, if you find one and say….’they are paying’ that is one which just has not gone out of business yet. Ponzi scams have been around long before the Internet, never one has been proven legit. Wake up man!! :-)
Thanks for your comments, sorry I’m not trying to be rude or mean, this is reality.
Mark
Hey Mark,
Ahhh, the fav subject again. We had been disagreeing about this on other lists before, as I recall, so I’ll take it up and paste an email I sent in reply to an exchanger wanting to discuss c-gold.com policies.
Cheers,
Robert.
“If someone offers 100% a day, then chances are that he is a crook, of
course.
However, what we will pay attention to is the site content itself. If an
invesment program shows a plausible business concept and itemizes the
amounts required to get started, and especially the maximum amount they can
reasonably handle, then we are willing to give them a shot, at least until
there are complaints.
Over the years as a hosting service provider, we did shut down many HYIP
sites, but every now and then there seems to be a genuine operator. One of
the easiest ways to spot them is because they limit the total amounts they
accept. Not the total from each customer, but the overall totals. You see,
making amazing profits isn’t that difficult in some locations, but it can
only be done on a smaller scale.
Years ago there was an operator who ran his investment program as a kind of
closed fund, where he accepted deposits up to a certain amount and until a
set date. On that date, 4 – 6 weeks in the future, he then made the payouts
in full, and started over. After a while he had several funds running
parallel. Turns out, he was a ticket scalper for major entertainment and
sports events. On some events he apparently made double or tripple the money
on each ticket. And there had never been a single complaint in his 8 months
of operation. After 8 months he cancelled the hosting account and stopped
the investment program, after paying out everyone.
When I asked him why he stopped, he simply replied that h had saved enough
to run his ticket scalping without third party investments…
Another guy was shipping containers of cheap handicrafts from the
Philippines to Australia, later also to Europe. He made on average 500% on
each container, but couldn’t have afforded to do it on this scale from his
own money. The HYIP he started paid like a clockwork, once a month, for
almost a year. After a few months he had problems selling to Australia, as
there wasn’t as good a market there anymore and local prices had dropped,
while suppliers in the Philippines jacked up their prices. Somehow he found
buyers in Europe and continued his operation for several more months until
he ran out of affordable supplies. This was when the investment program
collapsed. However, until then he had been paying everyone the promised
profits, and after the collapse he still paid out everyone the amounts they
had invested. Again, not the hallmark of a crook.
One pair of brothers from Nigeria (of all places), took over an existing
HYIP and built it into a huge operation, collecting literally millions. They
used the money to buy and flip US real estate for almost two years, and paid
25% per quarter, every quarter, for almost two years, before closing the
program.
In other words, smart people can make lots of money, given the right
conditions and sufficient start-up capital and cash flow. And they can do it
legally, but have often no other way of scraping the start-up capital
together.When we started our web hosting business, we had to grow it from
pure reselling of accounts from readyhosting in the US, at 80% margin.
Readyhosting gave us 50% discount on volume, and we ended up growing quite
quickly, because we ended up undercutting their own retail price. Took them
two years to realize that we were growing literally at their expense. Still,
we had to go that way because we didn’t have the capital to go bigger from
the onset. Had we raised funds through some investment program and bought
servers for co-loc right from the start, then we would have probably grown
into a huge outfit and managed an IPO back in 1999.
Of course, I’m too old fashioned for something like that and always have
problems to let go of a business I built. Nevertheless, in hindsight, the
opportunity was there, and I should have realized it, because we had been
proding BBS services from before there was a web, back in Europe.
So, to answer your question, if the HYIP has an underlying business concept
that makes sense and offers profits that are reasonably achievable, they
will be welcome to use c-gold. After all, we want to foster free markets and
spread prosperity. HYIPs are essentially the wild west stock markets of
small prospects in the online world. Like so many other businesses, many, if
not most, will fail, but some will grow and make all involved better off. As
long as an operator doesn’t run an outright scam, we are happy to
accommodate them.”
I have a question- do you know of a company that calls themselves IFS- Internet Financial Services. Are they reputable, or are they on the same level of all the scam artists that I have been researching off and on… If you have anything to tell or share with me, it would be a help to me… thanx