{"id":30681,"date":"2025-03-09T06:37:52","date_gmt":"2025-03-09T01:07:52","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=30681"},"modified":"2025-04-11T09:23:36","modified_gmt":"2025-04-11T03:53:36","slug":"ponzi-scheme","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/ponzi-scheme\/","title":{"rendered":"Ponzi Scheme"},"content":{"rendered":"<h2>Ponzi Scheme Latest News<\/h2>\n<p>The Enforcement Directorate seized a business jet at Hyderabad airport in a \u20b9850 crore Ponzi scam probe against a Hyderabad-based company and its promoters.<\/p>\n<h2>About Ponzi Scheme<\/h2>\n<ul>\n<li>A Ponzi scheme is an investment scam that pays early investors with money taken from later investors to create an illusion of big profits. A Ponzi scheme promises a high rate of return with little risk to the investor.\u00a0<\/li>\n<li><strong>Origin:<\/strong> The Ponzi scheme gets its name from a swindler named Charles Ponzi, who in 1920 became a millionaire by promoting a nonexistent investing opportunity.<\/li>\n<li><strong>Working:<\/strong>\n<ul>\n<li>It relies on word-of-mouth, as new investors hear about the big returns earned by early investors.\u00a0<\/li>\n<li>Inevitably, the scheme collapses when the flow of new money slows, making it impossible to keep up the payments of alleged profits.<\/li>\n<li>A Ponzi scheme is similar to a pyramid scheme in that both use new investors&#8217; funds to pay earlier backers.\u00a0<\/li>\n<li>A pyramid scheme usually relies on rewarding early participants to recruit more participants but collapses when the supply of potential participants dwindles.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Notable Ponzi Scams in India:\u00a0<\/strong>\n<ul>\n<li>Saradha Scam (2013): A multi-crore chit fund scam in West Bengal that defrauded lakhs of investors.<\/li>\n<li>Rose Valley Scam: A larger scam than Saradha, involving over Rs 15,000 crore.<\/li>\n<li>SpeakAsia (2011): A pyramid-like scheme posing as an online survey business.<\/li>\n<li>PACL (Pearl Agro Corporation Limited) Scam: Collected Rs 49,100 crore from investors under the guise of land investments.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Safeguards against Ponzi Schemes in India<\/h2>\n<ul>\n<li>Ponzi schemes are banned under the Prize Chit and Money Circulation (Banning) Act, 1978, a Central Act enforced by State governments.<\/li>\n<li>Additionally, the Unregulated Deposit Schemes Act, 2019 explicitly bans Ponzi schemes, further strengthening legal action against such frauds.<\/li>\n<li>These are also dealt with by the Enforcement Directorate under the Prevention of Money Laundering Act, 2002.<\/li>\n<\/ul>\n<h2>Ponzi Scheme FAQs<\/h2>\n<p><strong>Q1<\/strong>. What qualifies as a Ponzi scheme?<\/p>\n<p><strong>Ans. <\/strong>A Ponzi scheme is a fraudulent investment scam where returns to older investors come from new investors&#8217; money, not actual profits.<\/p>\n<p><strong>Q2. <\/strong>What is a Ponzi scheme vs. a pyramid?<\/p>\n<p>Ans. A Ponzi scheme promises fixed returns from new investments, while a pyramid scheme involves recruiting members who pay into the system.<\/p>\n<p><strong>Q3.<\/strong> What are the laws against Ponzi schemes in India?<\/p>\n<p><strong>Ans.<\/strong> Ponzi schemes are banned under the Prize Chit and Money Circulation (Banning) Act, 1978, and the Banning of Unregulated Deposit Schemes Act, 2019.<\/p>\n<p><strong>Source<\/strong>: <a href=\"https:\/\/www.ndtv.com\/india-news\/probe-agency-seizes-business-jet-at-hyderabad-airport-in-ponzi-scam-case-7877343\" target=\"_blank\" rel=\"nofollow noopener\">NDTV<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A Ponzi scheme is a fraud that uses money from new investors to pay returns to earlier investors.<\/p>\n","protected":false},"author":5,"featured_media":30682,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-30681","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/30681","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=30681"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/30681\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/30682"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=30681"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=30681"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=30681"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}