Hierarchical projects are projects that depend on the hierarchical model, also known as “schemes”Ponzi“, where its business model is to provide profits in certain proportions after bringing in other users, and the profits continue to be provided to old users at the expense of new users, until the scheme collapses permanently.

Spain-based trading software developer Arbicorp has recently been discontinued after introducing a cryptocurrency trading bot that promises 1% returns to anyone wanting to invest in cryptocurrencies.

The suspension decision came after more than 32,000 users complained that they were unable to withdraw the money they had previously deposited.

An estimated 120,000 bitcoins (about $1.2 billion) are at risk for this trading robot.

Read:6 Facts About Ethereum (ETH) You Should Know

As we mentioned, the Arbistar 2.0 trading bot offers daily returns of 1% for anyone willing to invest at least 3,000 euros ($3,500).

Bonuses were also offered to those participants who brought in new users.

Did the pyramid collapse?

As with any scheme of this kind, it seems time to break down.

According Allah After the company was accused of fraud, the problem was related to a bot bug that earned users more than they should.

However, the sudden stop, the inability to withdraw funds, and the losses of new investors are all features that suggest that the bot is running a pyramid scheme.

According to Tulip Research, which commented on the following about the robot:

Contributions from the platform can no longer be made and all accounts have been frozen without the possibility of reinvestment.

Profits have also not been paid from Saturday, September 12th, and all withdrawals have been suspended (…)

Arbistar: 1,000,000,000 Ponzi dollars

1 / Brief explanation of how to get this number:

Last year, Arbistar used BTCPayServer making use of PayJoin functionality to hide the money trail.

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TulipResearch September 14, 2020

Tulip Research estimates that investors have lost about $1 billion, although no official estimates have been released yet.

However, the company assures that it will pay all investors and confirms that its trading bot was a reliable product and not a “Ponzi” scheme even though they announced in the press release that they will not pay anyone who dares to take legal action.

Why do people keep falling for this type of scam?

Really confusing question.

Scams like this are widespread in the cryptocurrency market, which we publish almost on a daily basis in Arab Bitcoin and we always recommend the need to be careful and wary of projects that promise to provide returns in this way mentioned in this article.

But there are always unwary people who are willing to take high risks.

They are often so carried away by promises of quick profits and high returns that they are too attractive to think twice before depositing their money.

In early 2020, the office rated “BBB” Cryptocurrency is the second most risky investment of all time.

Read:A member of the Arab Bitcoin community tells the story of his exposure to a cryptocurrency scam

Where 32% of the scams involved buying cryptocurrencies, 23.4% had to do with cryptocurrency as an investment opportunity, and 31% were linked to the suspicious Chinese trading platform C2CXr.

“Manuel” is one of those affected by the trading robot, the focus of our article, as he invested 7,000 euros in the project, he explained to the Spanish news site. “Newspaper” It is all about securing the future in times of crisis. He stated:

Why get into this mess?

It is impossible to have a family or buy an apartment today in Spain.

Now I’m working in Dublin, and I thought I’d invest to see if I could buy a house in the future in Spain.

Unfortunately, Manuel did not get neither the money nor the housing.

Read also:

Practical steps to avoid fraud and Ponzi schemes in the cryptocurrency market

Nevada company accused of running $11 million bitcoin-based Ponzi scheme