US authorities have uncovered yet another cryptocurrency scam that promised each investor more than $50 billion in profits and a luxury Bentley in exchange for $100,000, Markets Insider reports.

Bloomberg somewhat ironically notes that “the simplest form of investment fraud is when you promise people attractive returns on their investments, they like the promised return and give you their money, and you steal it. What type of winnings should you give your targets in this type of scam to increase your share? There are two main approaches:

1. Reasonable profit;

2. Crazy victory.”

The first approach became famous thanks to Bernie Madoff, who led a huge Ponzi scheme that provided modest and relatively stable profits. The first advantage of this approach is that it can attract more sophisticated and financially resourceful investors, while Madoff can take money from famous and influential people who have concluded that the promised returns are reasonable.

But the second approach also has its advantages, one of which is that it won’t attract overly sophisticated investors, which is an asset when you’re actually using a scam. And when you promise a 1,000,000% profit, you guarantee that you will attract only the most gullible “targets” to the scheme.

The second approach seems to have favored a group of individuals and companies in the United States who have been charged by the US Securities and Exchange Commission (SEC) with defrauding investors of $45 million.

CoinDeal, another crypto scam

According to the SEC, CoinDeal’s “business” was an investment scheme that promised tens of thousands of investors incredible profits from the sale of “one-of-a-kind” blockchain technology that was supposed to be worth trillions of dollars.

Neil Chandran, a tech entrepreneur who immigrated to the US from India, and his associates have been running the scam since at least January 2019, spreading a series of misrepresentations about the value of CoinDeal, negotiations for a blockchain sale, and how investors’ money was used.

“As set forth in our complaint, this was in fact simply an elaborate scheme by which the defendants enriched themselves while defrauding tens of thousands of individual investors,” the SEC said.

In June of last year, US authorities had already charged Chandran with fraud and illegal currency transactions related to his CoinDeal business. Among the promises he made was that the US Department of Homeland Security was interested in the company’s blockchain.

An offer that is hard to believe

The payouts promised by Chandran are so incredible that it’s hard to believe that they could scam anyone.

According to the SEC, a table presented to potential investors showed that a $100,000 investment in CoinDeal would return them $56.25 billion, while a $500 investment would return $12.5 million.

One of the ways he managed to keep the scheme going for more than three years was by providing regular “updates” to those he took money from on how negotiations for the sale of the blockchain were going and other relevant “information” about the company.

Among the excuses Chandran came up with when some investors started pressing him about why the sale didn’t happen was that “an engineer called yesterday and said he couldn’t come to work because he was sick.”

No, this is not a joke.