Investment Scams & Ponzi Schemes

An investment scam is any fraudulent scheme that convinces you to hand over funds under the promise of returns that never materialise. The organiser either disappears with your money or pays early investors using funds from newer ones to create the illusion of legitimate activity.

A Ponzi scheme is one of the most well-known forms of investment fraud. It works by using money from new investors to pay returns to earlier ones — creating the appearance of a profitable operation where none exists. The scheme only survives while new money keeps coming in. When it stops, it collapses, and most investors lose everything.

In crypto, these schemes are particularly effective because the market is less regulated, returns can be volatile and high, and many investors are still learning how it all works.

Ponzi Schemes — Returns are paid to early investors from new investor funds, with no real trading or investment activity taking place.

Managed Account Scams — Someone offers to trade crypto on your behalf, produces fake profit statements, then disappears when you try to withdraw.

Guaranteed Return Schemes — A platform or individual promises fixed daily, weekly, or monthly returns regardless of market conditions.

Yield Farming Scams — Fraudulent DeFi platforms promise extraordinarily high yields to attract deposits, then drain the funds.

Copy Trading Scams — You're invited to mirror trades from a supposedly expert trader who is generating entirely fake performance data.

Recovery Scams — After losing money to a scam, you're contacted by someone offering to recover your funds for an upfront fee. This is always another scam.

• Promises of guaranteed or unusually high returns with little or no risk
• Pressure to recruit other investors to increase your own returns
• Vague or overly complex explanations of how returns are generated
• Difficulty withdrawing funds, or unexplained delays when you try
• Returns that appear consistent regardless of market conditions
• The platform or individual is not registered with any regulatory authority
• Unsolicited investment offers via social media, messaging apps, or email
• Requests to move your funds off a regulated platform onto an unknown one

Example: You're introduced to a crypto investment platform through a friend who has already seen impressive returns. The platform shows steady daily gains and allows small withdrawals at first to build trust. When you deposit a larger amount and try to withdraw, you're told you must pay a tax or fee first. The fee is paid, but the funds never arrive. The platform disappears shortly after.

These two are often confused but operate differently. In a Ponzi scheme, returns are paid from new investor funds and participants don't need to recruit anyone — the operator controls everything. In a pyramid scheme, participants are required to recruit new members to earn returns, and each level of recruits funds the level above. Both are fraudulent. Both collapse. Both result in most participants losing their money.
 

• Is the platform registered? Verify that the company you are dealing with is properly registered with the applicable regulatory authority.
• Can you independently verify returns? Be sceptical of platforms that show only internal dashboards.
• Is there a clear explanation of how returns are generated? Vague answers are a serious red flag.
• Can you withdraw freely? Test with a small withdrawal before committing larger funds.
• Has the platform been independently audited?
• Are others talking about it outside the platform's own community?

• If it sounds too good to be true, it is — no legitimate investment guarantees consistent high returns
• Never invest more than you can afford to lose
• Be wary of unsolicited investment advice from anyone you met online, regardless of how credible they seem
• Only use registered and regulated platforms
• Be especially cautious of recovery offers — anyone claiming to recover lost crypto is almost certainly running another scam

Don't send funds or share personal information. Research the opportunity independently, report it, and contact Ndax support if the offer appeared to be associated with Ndax.

Stop sending funds immediately — even if you are told more money is required to unlock your returns, pay taxes, verify your account, or recover your original investment. Do not pay fees to release or recover funds; this is a common secondary scam.

Document everything, including transaction records, wallet addresses, emails, phone numbers, website URLs, account dashboards, promotional materials, and conversations with the person or platform involved.

If you transferred crypto from your Ndax account, contact [email protected] right away. Cryptocurrency transfers are generally irreversible, but your report may help us review the activity and protect other users.

If fiat funds, bank transfers, credit cards, debit cards, or payment services were used, notify the financial institution where the funds originated. If significant funds were lost, consider seeking legal advice.
 

• Report to Ndax at [email protected] if your Ndax account was involved or crypto was transferred from your Ndax account
• Report to the CAFC at antifraudcentre.ca
• Report to the RCMP at reportcyberandfraud.canada.ca
• Notify the financial institution where the funds originated, such as your bank, card provider, or payment service provider
• Report fake profiles directly through the relevant social media, messaging, or dating platform