A Brief History of the Top Ten Financial Eyewashes: From Stamp Scams to Crypto Assets Traps

Why do Ponzi schemes never die for decades? Because the weakness of human greed never changes - as long as high returns are promised, people will line up to send money. From the stamp scam of 1920 to the Cloud Token of 2019, these eyewash schemes have become larger in scale, yet the methods are surprisingly similar.

Early Classics: From Stamps to Bonds

Charles Ponzi (1920) defrauded $20 million (worth hundreds of millions today) with the promise of “50% profit in 45 days and doubling in 90 days.” He claimed to trade international postage stamp arbitrage, but in reality, he did nothing and used the money from new investors to pay interest to old investors. This scheme was absurdly successful and directly rewritten the history of eyewash.

Imperial Bond Company (1970s) A $250 million case, claiming government endorsement and guaranteed profits from investing in overseas bonds, scared U.S. regulators into directly strengthening the scrutiny of investment companies.

Era of Masters: Scale Upgrade

Bernard Madoff (2008) This guy is the true master of eyewash—he deceived $65 billion with a consistent “stable return rate” of around 10% for over 40 years without being exposed. It wasn't until the financial crisis and the breaking of the funding chain that it was revealed. He was sentenced to 150 years in prison, setting a new record for the scale of a Ponzi scheme.

Allen Stanford (2009) used high-yield certificates of deposit to attract investors, packaging it in a way that created the illusion of strong financial capacity, scamming 8 billion dollars, 110 years in prison.

High-Risk Zone: MMM to Russia

MMM Financial Eyewash (1990s) emerged during the collapse of the Russian economy, directly promising extremely high returns, attracting millions of ordinary people to participate. In the end, it resulted in losses exceeding $1 billion, with one million investors losing all their capital, nearly triggering social conflicts.

Unity Bank (1980s) Romanian eyewash, with a monthly return rate of 40%, leading to mass bankruptcies and social unrest.

The Internet Era: New Wine in Old Bottles

ZeekRewards (2012), under the guise of online auctions and dividends, was essentially using new investors' money to pay returns to earlier investors. $600 million evaporated, and the SEC began to closely monitor online investment projects.

PT Pyramid (2005) The Indonesia case, under the guise of gold and real estate investment, resulted in the loss of 500 million USD.

Crypto Circle Warning: Cloud Token

Cloud Token (2019) The last and most crucial point - it claimed to use AI algorithms to automatically trade cryptocurrencies, attracting millions of investors from Southeast Asia. After defrauding hundreds of millions of dollars, the founder absconded with the funds. This case directly exposes how easily the cryptocurrency sector can be exploited: cryptocurrencies can be created without barriers, cross-border transfers are quick, and there is a regulatory vacuum… a perfect tool for crime.

Why do Ponzi schemes always exist?

Looking at the history of eyewash over the past 100 years, there are two patterns:

Rule 1: Economic Difficulties Are High-Risk Periods MMM exploded during the collapse of the Russian economy, and Cloud Token became popular during the crypto bear market. The poorer people are, the more they want to turn their situation around, making it easier for scammers to take advantage.

Rule 2: Emerging Fields are Legal Gray Areas After the stamp scam in 1920, legislation caught up. However, the internet finance and cryptocurrency of the 2010s have become new loopholes. Regulation is always behind innovation.

Three Identification Points

1. Be cautious if the return rate exceeds 10% The global average annual return of the stock market is 7-8%, and P2P promising more than 15% is basically eyewash. Anyone claiming stable high returns is deceiving.

2. Promises to hedge risks are problematic “Using AI for trading guarantees no losses” “Investing in gold with zero risk” such statements are to be directly passed; there is no high return without risk in the financial world.

3. Follow the Money A legitimate investment company can specify its investment targets, held assets, and audit reports. Those that only tell stories without showing their books are just eyewash.

Bottom Line Cognition

In the past 100 years, eyewash has never innovated its tricks, only changing its disguise. Whether packaged as stamps, bonds, auctions, AI, or cryptocurrency, the core logic remains: using the money of newcomers to pay the interest of old investors. As long as there are people who believe in free lunches, Ponzi schemes will never go out of style.

There are no shortcuts to investing. Projects that promise monthly interest, annualized returns, and stable high returns are 99% eyewash.