A New Crypto Pyramid Scheme In the Name of Ripple Bilk 100,000 Naive Investors In China
In the name of the well-known blockchain startup Ripple,a new cryptocurrency pyramid scheme known as Ripple Reserves(or Ripple Fed) has bilked hundreds of thousands of naive investors out of a substantial sum of money in China, according to local news outlet BlockBeats.
Ripple Reserves describes itself as a cutting-edge storage platform for Ripple’s proprietary tokens ,XRP, and is initiated by the so-called Ripple Fund’s co-funder Tony, according to its website. The platform’s aim is to provide market making opportunities for XRP holders, reduce the speculative tradings of XRP through deposit and expand the use of ripple blockchain to achieve the cheap and convenient cross-border payments.
The team is disseminate the misleading information through paid advertisements on Baidu, the Chinese Google and on other Chinese social medial platforms such as Tencent’s Wechat, although China’s major social media networks and search engines assert they have blocked paid searches or ads on cryptocurrencies.
In June, a China-based Ponzi scheme early-warning platform called Wukong Evaluation investigated the project and said it had nothing to do with Ripple. Ripple team also responded to Wukong’s request for comment in an email, clarifying that “there is no relationship whatsoever. Ripple Fed or xrpf.com is using our logos and trademarks without permission. We suggest you be wary of them”.
Ripple Reserve staff told BlockBeats that they have 100,000 investors across the world now and there are newcomers to join the game every day. Investors will get different interest rates based on their XRP holdings and the period they stay in the group. Based on the same token amount, the longer an investor’s XRPs keep in the platform, the higher interest rate he will receive. And The minimum deposit is $1000.
Ripple Reserves launches a XRP wallet and once investors put their XRP in this wallet, they can only withdraw principal and interest after the expiration date. They cannot withdraw their tokens earlier no matter what happens.
And It’s a classic financial pyramid scheme featuring referral commissions. Although the company is registered in the U.S., it mainly targets innocent investors in China. And it has not been busted by law enforcement both in China and the U.S. It remains unclear the exact amount of money it defrauds out of investors.