BTC Arbs Bitcoin Arbitrage And Other Ponzi Schemes

8 Mar
2014

btc-arbs-bitcoin-ponzi-scheme

We have been asked by a reader about our opinion and to to check out a website called BTC Arbs that supposedly offers daily returns of invested money or Bitcoins of 0.1% to 10%. What the website claims to do in order to provide so high daily returns on invested money or BTC is arbitrage of Bitcoins between different exchanges. The website seems to be well designed and looks very convincing in terms of information available on it. The minimum investment is $50 or 0.05 Bitcoins and the site accepts direct Bitcoin transfers as well as money deposits from investors with no maximum investment amount. The website even has a Results page a daily return rate on your investment, so everything seems really legit, especially if you do not look into things in detail and are captured by the high profit you are promised. The problem however is that the website is most likely just a scam and another well made Ponzi Scheme that is there to make some quick money at users’ expense!

What should raise a warning in this websites and other sites at first is the very high return rate or the so called high-yield investment program (HYIP) that you are being promised on a daily basis, this is the most common thing for Ponzi Schemes that attracts user’s attention and fuels their greed a lot. Up to 10 percent per day means you can get rich very fast for doing nothing, yeah, right… in reality just the opposite. The next thing you should look into is who is behind the website, and the only thing about that you can find on the website is that it is based in Switzerland, however there is not info about the company or address or event at least mail or phone to contact them on the Contact page. Furthermore the website claims to be created in November of 2013, but a quick whois returns different data – Creation Date: 2014-01-04 20:13:00, anonymous registration and hosted in a web server in Malaysia. It all seems less an less legit and clearly the website claims things that are far from true…

You can see that some people have already tested the BTC Arbs service and report making some money already on top of their investment and withdrawing their earnings successfully. This is a normal way of operation – the first “investors” in a Ponzi Scheme do get paid in order to convince them that everything is working as promised and to encourage them to invest more and more into the service and to bring other people too. In reality however the “earnings” the earlier “investors” are getting do come from money that new users brought to the service are investing into it. And as soon as the authors of the Ponzi Scheme decide to get away with the all the money everything will fall down and some people will actually loose money. But even in this scenario if you are one of the “early investors” and use the service for just a few days with small amount of Bitcoins (never invest real cash into such Ponzi Schemes!!!) you might actually end up making some cash. Never, never and NEVER invest long term in a Ponzi Scheme or HYIP website, but what is even better thing to do is to stay away from such websites! We would not recommend to use services such as this one, even if there is some small chance to actually profit from using them, because this will be at the expense of somebody else just like you!

In short – if something looks too good to be true, then it probably is and you should be wise and best avoid it.

High-yield investment program (HYIP)
A high-yield investment program (HYIP) is a type of Ponzi scheme, an investment scam that promises unsustainably high return on investment by paying previous investors with the money invested by new investors. Most of these scams work from anonymous offshore bases which make them hard to track down. Operators generally set up a website offering an “investment program” which promises very high returns, such as 1% per day or even more, disclosing little or no detail about the underlying management, location, or other aspects of how money is to be invested. Or giving you a nice story about the whole thing such as BTC arbitrage, that may sound believable to newbies or people that are generally not very experienced and haven’t suffered yet from such a fraudulent scheme.

Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from existing capital or new capital paid by new investors, rather than from profit earned by the individual or organization running the operation. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme. The scheme is named after Charles Ponzi, who became notorious for using the technique in 1920, even though he did not invent the scheme, but his operation took in so much money that it was the first to become known throughout the United States. Ponzi’s original scheme was based on the arbitrage of international reply coupons for postage stamps; however, he soon diverted investors’ money to make payments to earlier investors and himself.

Other similar websites to be careful with:
Bitcoin Trader
My Daily Coin
Cryptory
Fin Mutual
Bitco Financial
Laxo Trade
Rockwel Partners
Hex Fund

The above list contains a few more websites that do rise some concerns as well, though we are not saying that they are all scams for sure, still we recommend to be careful should you decide to try them out. If you still want to try them out do so with the minimum investment amount and do not be in a hurry to invest a lot of coins! Do note that usually if somebody promises you a 2-5-10% or more daily return of investment or even more you should really be careful and that applies not only to crypto currencies.



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8 Responses to BTC Arbs Bitcoin Arbitrage And Other Ponzi Schemes

Matt Gravis

March 9th, 2014 at 03:21

Thank you for this expose – I was considering investing in BTC Arbs but have now changed my mind. What is your assessment of Bitcoin Trader? It sells shares of “mining” or “trading” (arbitrage) and tends to earn 0.5-1.5%/day. From my research and experience it seems legit and very well-run, but would you put it in the same category as BTC Arbs given the high yield?

admin

March 9th, 2014 at 10:45

Matt Gravis, the bitcoin trader website does seem to be exactly the same as the website above. It shares pretty much the same idea and the implementations look almost exact, even though it does look a bit better designed and run, giving the more “serious” and “legit” approach, but it is still most likely a Ponzi Scheme. So stay away from it if you don’t want to risk it…

Simon Dudley

March 23rd, 2014 at 02:17

Unfortunately, I only found this review of a BTC-Arbs after I have made a test investment of 0.1 BTC yesterday. I have “made” 0.7% overnight, and have now withdrawn my 0.1007 BTC. However, BTC-Arbs says they the withdrawal process will take 36 hours! What rubbish!! I will wait and see if my test investment is paid out and report back.

Simon Dudley

March 25th, 2014 at 00:56

Well, I have received my 0.1007 after 36 hours of waiting, but this does not make the site legit. As the article suggests, I was probably an “early investor” who the site operators deemed should be paid out in order to increase the reputation of the site and attract more gullible investors. I would expect at some time in the future when they have enough investors money, the site will just vanish without a trace…

Gamal Marwan

April 25th, 2014 at 04:31

BTC-ARBS took 65BTC’s from me then disabled my account and I cant login to retrieve my money. When I tried their support they dont answer. I had to go on their Facebook page (https://www.facebook.com/pages/Btc-Arbs/1455469264688042) the only reason they answered is because I commented on the wall and they said it will take a long while to sort out my login issue because they get 700 requests a day. The basically took off with my money because Password reset is automated. They even deleted any trace of my email that way I cant reset the password. Good think I took an image of the site every day and the transaction records and all correspondence with it’s proprietor Adam including his emails asking me to send US$ to an account in Hong Kong with all the bank account details.

The guy that runs the one man show is called Adam. They claim to be based in Geneva which is bogus, Adam claims he lives in Canada but now is in China. Their Bank account is in Hong Kong and the website is registered in panama. Sounds like Alcapone. I have details of the details of their account in Hong Kong which I will turn over to the authorities here in America if they dont return my money in a couple of days on the hope I save someone else from being suckered.

somebody

June 29th, 2014 at 21:48

The bitcoin arbitrage sites are all scams. I tried BTCreturn.net, they just kept asking for more deposits and never withdraw anything. The site is all smoke and mirrors.

MyDailyCoin, however, seems different. It has given me the promised returns every day for over a week now. And I have withdrawn, and can do so at anytime. The only catch is they take 5% when you release your principal for a withdrawal.

I was also referred to the site by another user, who I met on a legitimate mining site, and according to this person they receive regular payouts as well.

In short, Arbitrage = SCAM. MyDailyCoin = PAYING.

somebody

June 29th, 2014 at 21:50

1 – 2% can be real. Anything beyond that is almost GUARANTEED to be a scam.

anycoin

July 2nd, 2014 at 14:40

I have been using bitcoin trader for several months now and have been recieving the daily payouts. I only used a test amount(1 share) which is 20.00 US. It does seem to be working and their
tech support is alive and well, I got an immediate response. I know this doesnt mean that it could not be a scam but at least I can communicate with them. The payouts are not huge but they have
ranged from .67 to 1.07%.

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