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In the last few years, there have been a lot of fraudulent investment schemes, like Ponzi schemes, in the world of cryptocurrencies. One example of this kind of scam is Xifra, a bitcoin investment platform that promised customers big returns on their money. The plan was then brought back under the name Decentra, but the person who came up with it ran away to Dubai right before it was found to be a scam. In this article, we’ll talk about the Ponzi scheme called Xifra and its second version, called Decentral.
In 2018, a group of people who don’t want to be named started the Xifra project. It was said that the plan would make money by using a complex trading algorithm. This made investors want to put their money in because they would get a lot of money back. Investors were promised profits of up to 5% per day, and there was no way they could lose money.
Xifra quickly caught the attention of investors in cryptocurrencies, and many of them put a lot of money into the project. Investors came from the United States, Canada, Europe, and other parts of the world to take part in the program.
Late in 2019, Xifra couldn’t keep running, which caused investors to lose a lot of money. In the end, it was found that the program was a Ponzi scheme in which returns were paid with money from new investors. The scam relied on new investors to pay returns to the people who had already put money in since the money that was promised through trading was never really made.
After putting everything they owned into the program, many people were left with nothing in the end. Because many investors put down large amounts of money without fully understanding the risks, the failure of the Xifra cryptocurrency exchange made it clear that the cryptocurrency business needs tighter regulations and more oversight.
Rebrand themself as Decentra
The founder of Xifra didn’t care that the company failed. He kept working on his plans. At the start of 2020, the program was relaunched under the name Decentra, with a new website and promises of even more money.
In its advertising, Dicentra was sold as a decentralized platform for investing in cryptocurrencies that used blockchain technology to make money. Investors were promised returns of up to 10% per day, and they couldn’t lose money on their investments.
Soon, investors in cryptocurrencies started to like Decentra, and many of them put their profits back into the plan to make even more money. Still, the plan only worked for a short time before it was thrown out just a few months after it was put into place.
Attempting to make it to Dubai
When Decentral failed, the man who started it was never seen again. People think that he made it to Dubai and is now living a luxurious life there.
Investors in Decentra lost a lot of money, and many of them lost their entire life savings because they put money into the scheme. The failure of Decentra has once again brought attention to the urgent need for more governance and regulation in the cryptocurrency sector.
Problems Associated with Regulations
The failure of Xifra and Decentra showed how hard it is to regulate the cryptocurrency business. Some places have started to try to regulate the business, but many places still don’t have the right laws and monitoring in place.
Since cryptocurrencies are decentralized, it is hard for the government to find and punish people who use them to commit fraud or scams. Scams that use cryptocurrencies are often run by people who want to stay anonymous and do their business from places outside of the country. This makes it hard for authorities to find and punish scammers.
As a warning to people who want to invest in cryptocurrency, the Xifra Ponzi scheme and its later rebranding as Decentra should be remembered. Several investors lost a lot of money because of the failure of both schemes, which shows how important it is to improve regulation and oversight in the sector.
The fact that the person who made both scams was able to avoid authorities in the cryptocurrency business by running away to Dubai shows how hard it is to regulate the business. Due to the decentralized nature of cryptocurrencies, it is hard for authorities to find and punish fraudsters, and many governments don’t have the resources or knowledge to keep an eye on the sector.
Before investing in any scheme, people in the cryptocurrency business need to learn about the risks involved and do the research that is expected of them. The failures of Xifra and Decentra should teach people who want to invest in a cryptocurrency that there is still a lot of risk in the market.
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