Bitcoin has often been touted as a Ponzi Scheme- although it clearly is not – but the world of traditional finance is filled with similar pitfalls. In the case of wealth management platform WealthRoll, the platform turned out to be a complete scam, and the founder has confessed he was running a Ponzi Scheme to defraud investors.

WealthRoll Ponzi Scheme Affects Investors Globally

Any investment platform offering a fixed return of funds on a monthly basis needs to be avoided at all costs. In this day and age of low to negative

Things started out quite well for

All of the proceedings were sent to the Wealthroll asset pool, which allowed the company to pay sales managers a commission between 4% and 400%. Additionally, the company rented multiple office spaces in Shanghai to strengthen their corporate and legitimate image. That being said, it was only a matter of time until the pyramid started to crumble.

In April of 2016, Wealthroll was shut down due to an unpaid debt to nearly 13,000 individual investors, which warranted a thorough investigation by the Shanghai police. On May 3rd, Xu Qin and several dozen other company executives were arrested by law enforcement, on suspicion of defrauding investors on a large scale.

As it turns out, Wealthroll was a Ponzi Scheme from the start, and Xu Qin admitted that fact live on television. This goes to show that financial regulators need to keep a very tight leash on companies dealing with fiat currency, rather than Bitcoin. After all, fiat currency can hardly be traced, whereas Bitcoin transactions are broadcasted in real-time for anyone in the world to see.

Source: Crowdfund Insider

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