High Yield Investment Programme, HYIP, is very popular among cryptocurrency investors, especially, those who want to get rich overnight, but the most dangerous investment scheme on the internet. You can replace “dangerous” with risky, but that does not change anything.
The power of these schemes lies in their mouth-watery returns.
HYIPs existed as early as the 1990s, and the introduction of digital payment systems and how anonymity has been incorporated into the recent decentralized currencies have made it very attractive to both the founders and the investors.
How High Yield Investment (HYIP) Works
HYIP websites ask investors to deposit an amount in Bitcoin, Ethereum, Perfectmoney or any other online payment system, and promise to give them a percentage of their deposits in daily basis, weekly basis, monthly basis, and some in yearly basis.
The percentage return usually ranges from 1% to 4% daily. In many occasion, some websites promise to give 100% profits on the deposit in just two days or seven days. Some websites have a minimum deposit of as low as $1. Some of the HYIPs also require a minimum deposit of $20. When the investment gets matured, investors can withdraw by issuing a payment request which are manually approved by the admin. Other websites, also, offer instant withdrawal.
This scheme in most of the times take advantage of the bull run of Bitcoin and other known altcoins, and it is expected to rise as Bitcoin halving is predicted to cause a massive market price surge.
Why High Yield Investment Program (HYIP) is Dangerous
What happens is that, most of these HYIP websites, if not all, do not have a genuine certificate or license to operate. Some of the websites generate fake certificates and display them on their platforms to win the trust of investors.
Also, their locations are usually unknown, and the ones provided by some of them are fake. The identity of majority of the Administrators remain unknown, and this makes it more dangerous. A business deal or investment which one of the players facilitate operation from the dark is certainly not trustworthy.
After these HYIP websites remain online for some time, they eventually vanish without notice. HYIPs always have deadlines that are unknown to the investors. Before the deadline, they may approve all withdrawal request, but once the deadline is due, withdrawal requests will start pending, and after days and weeks of complaining and hoping, the website would eventually vanish. Some of the websites do not shut down completely. They remain online to accept deposits, but deactivate withdrawal buttons.
HYIPs Are Unhealthy Investment Schemes
I have a friend from Philippines who went for a bank loan to invest in these fraudulent schemes. The website stopped paying after some weeks of operation, and the rest was history.
Thousands of HYIP programmes have been in existence and 95% of them have vanished with new ones emerging.
Some years back, a HYIP program known as Obofund emerged. After amassing millions from investors, it vanished and came back with an excuse that the website was hacked. Within some few days, the Admin launched another website called Obofundpro, and it also vanished in less than a month. Another one called Oboprivate was also introduced, and it also vanished without noticed.
One other website which stayed online for over a year, called Venture-Alliance, also started making waves among investors who were looking for trusted HYIP programs for a long term investment. Once Venture-Alliance became popular and started recording many deposits, it vanished just like the others.
There are hyip monitor websites that give updates on the status of the various HYIP program. They alert investors whether a website still pays or not. Remember that the HYIP monitors are only there to provide the status of the websites, but do not guarantee that they will exist forever.
This kind of investment schemes have contributed to the many misgivings of the positive aspect of Bitcoin, aside from those who make different argument by comparing Bitcoin to the Tulip Mania.
Authorities have Warned Against Hyip Investment
The danger imposed by these schemes has called the attention of the authorities who have in return issued out warnings.
In 2010, the Financial Industry Regulatory Authority warned that the “the con artists behind HYIPs are experts at using social media — including YouTube, Twitter, and Facebook — to lure investors and create the illusion of social consensus that these investments are legitimate”. In this case, investors should understand that the legibility of a scheme does not lie in how professional and convincing the advertisement banners to look.
HYIP programs are extremely dangerous, and if anyone still wants you to go ahead after reading this post, then my friendly advice is: “know when to leave”.