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The Almighty Buck Crime

Argentina's 'Generacion Zoe' Promised Financial and Spirtual Development. Was it a Ponzi Scheme? (restofworld.org) 53

Posted by EditorDavid from the having-faith dept.
It was a mix of spiritualism and financial education, remembers one patron of Generación Zoe, which "pitched itself as an 'educational and resource-creating community for personal, professional, financial and spiritual development,'" reports Rest of World: Generación Zoe claimed to make money through trading, and promised a 7.5% monthly return on investment for three years for those who put money into its "trust." In Argentina and other countries, other companies with the Zoe name peddled a similar narrative... It included a "university" that offered courses on ontological coaching, a type of philosophical practice popular in some Argentine business circles...

Over 2020 and 2021, more than ten thousand people bought into Zoe, investing hundreds of millions of dollars between them. Zoe grew rapidly, hyping new tech innovations including the "robots" and a cryptocurrency called Zoe Cash. Its interests and visibility expanded: The Zoe name appeared on burger joints, car dealerships, a plane rental company, and pet shops, all emblazoned with its name. It sponsored soccer teams and even created three of its own... Zoe also spread beyond Argentina to other countries in Latin America and further afield, including Mexico, Paraguay, Colombia, Spain, and the U.S.

Towards the end of 2021, however, the shine began to wear off, as authorities began looking into Zoe's activities... Zoe members reported being unable to withdraw the funds they had put into trusts or "robots," and in early 2022, the value of Zoe Cash plummeted. Angry investors banged on the doors of Zoe's branches, and investigations against Zoe and Cositorto piled up across Latin America, Spain, and the U.S.

By March 2022, a handful of high-profile names involved with Zoe in Argentina had been arrested, or were wanted by the authorities...
Prosecutors now accuse Zoe of being nothing more than a simple Ponzi scheme.
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Argentina's 'Generacion Zoe' Promised Financial and Spirtual Development. Was it a Ponzi Scheme? More

Argentina's 'Generacion Zoe' Promised Financial and Spirtual Development. Was it a Ponzi Scheme?

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  • Religion + Money (Score:5, Insightful)

    by Tablizer ( 95088 ) on Sunday April 23, 2023 @12:04AM (#63470538) Journal

    ...what could possibly go wrong?

    • ...what could possibly go wrong?

      A lot can go wrong. That is why we need to expand prediction markets so that sensible people can bet against these scams and stupid people can be forewarned.

    • an 'educational and resource-creating community for personal, professional, financial and spiritual development,'

      Yes, it was a Ponzi scheme. Or at least nothing legitimate, whatever it was.

      • Sounds like Scientology.

      • The one thing that would keep it from being a Ponzi scheme is that it seemed like the "investors" were strongly coerced to leave their money in. Even in articles, I can only see people who were going to withdraw but instead put in more money. If your withdrawals are covered by later investors, sure - Ponzi scheme. I'm not sure if a single person successfully made a withdrawal because I can't find any such reports.

        They definitely seemed to be doing dozens of things at once, and at least some of it was def

        • The one thing that would keep it from being a Ponzi scheme is that it seemed like the "investors" were strongly coerced to leave their money in.

          That is almost the defining feature of a Ponzi scheme. It fails when more than a handful of "investors" (actually: marks) try to take money out.

          The people who created the scheme-- yeah, they take money out. But they're not "investors". The marks? The scheme requires that money flows from the marks, not to them. When a mark say they want to take money out, you remind them how much money they're making, and persuade them to leave their money in place "just little longer".

          • What I mean is I can't see any reports of anyone at all getting money out during the entire time. If you're not paying original investors with new investors' money, the name won't fit.

            • What I mean is I can't see any reports of anyone at all getting money out during the entire time.

              The people who set it up.

              If you're not paying original investors with new investors' money, the name won't fit.

              The "original investors" aren't actually investors. They are merely the first of the marks to put their money down. Yes, Ponzis may sometimes pay some of these a little trickle of money back, just to "prove" that the "investment" was "real", but that's only to encourage them in "invest" more.

              • Yes, Ponzis may sometimes pay some of these a little trickle of money back, just to "prove" that the "investment" was "real", but that's only to encourage them in "invest" more.

                If nobody that's not on the inside gets a payout at all it's not a Ponzi, it's just keeping people's money. Still fraud.

      • No new financial scheme, such as a DEFI system or cryptocurrency exchange, can withstand witchhunt persecution i.e. an attack on its legitimacy which becomes a powerful meme.

        All financial systems, including national currencies, rely on at least a minimum level of collective trust, in order to maintain their value. Their value may be indirectly linked to other things, like the size of transactional churn of an economy that uses that currency, but that size of churn is all based on a level of trust in that cu
    • The problem us that they never figured out how to squirt their Zoe.
  • I, a proud subscriber to the CryptoBros Incorporation for Spiritual Stuff and Shit, run by the great guru Scammy McScamsAlot, can tell you this sounds like a wonderful program you should sign up for immediately. You should sign up for it several times in fact.

  • Yes (Score:2)

    by Cyberax ( 705495 )

    Argentina's 'Generacion Zoe' Promised Financial and Spirtual Development. Was it a Ponzi Scheme?

    Yes. Next question?

    • Re: (Score:2)

      by dgatwood ( 11270 )

      I think that's safe to say.

      Anybody claiming a 138% APY (assuming 7.5% is compounded monthly, 90% if base-price-relative) is pretty much guaranteed to be some kind of scam. That basically exceeds the best single-year growth of any stock I've ever had in my portfolio, with the exception of one particularly amazing year for TSLA. There's no way you'd be able to guarantee that much growth.

      7.5% per YEAR, yes. Per month? No way. Not without insider trading, illegal market manipulation, or high-frequency tra

      • This is not the US. Argentina has short term rates above 80% (https://www.reuters.com/markets/rates-bonds/argentina-central-bank-debate-rate-hike-no-decision-yet-made-sources-2023-04-20/). Meaning in that country, you can invest and expect that return risk-free. Of course, when inflation is 100%, you're still not that much better off.

        Why the hate for HFT? You make it sounds like a vastly profitable business, but it's more of a grind, with low returns and sizable costs (as %age of returns). From what I've se

        • Re:Yes (Score:4, Informative)

          by iAmWaySmarterThanYou ( 10095012 ) on Sunday April 23, 2023 @05:22AM (#63470742)

          Because HFT has a tendency to fuck up markets by overbuying/selling and is also used to scrape more of the buy/sell price gap from non HFT traders who can't compete with them in a fair market.

          HFT does nothing to create or improve the health of the markets. They're parasites.

          • They're parasites.

            Specifically leeches. They keep the market moving with their anticoagulant behavior, but they take a sizeable cut.

          • If the argument is "HFT bad because they move markets", then I have news for you, a lot of financial actors are in that category with way more impact than HFTs. Maybe you meant CTAs? Risk parity? Risk control? Passive investing?

            • I'm not saying HFT is the only bad thing happening in the markets. There is a ton of ugly unethical shit going on but HFT was the topic.

              We don't need HFT to move markets. They're entirely artificial buy/sells. They don't move anything except cut down the potential gains by real traders and distort true market values.

              • Without entering the discussion of "whats bad and whats worse", it strikes me that HFT is the posterchild that people give on this website for "stuff that is wrong in financial markets". Not sure how/why it became the boogeyman. Maybe because of the 100% automation, compared to other forms of trading. That was more my point. Oh, and the fact that it had absolutely nothing illegal about it, unlike Ponzi schemes. It's just something people just love to hate I guess, for reasons that elude me.

                • I get what you're saying and I agree with you. There are worse things going on than HFT, many of them illegal and tons more of them unethical (not yet illegal but should be). I think the reason HFT is such a big deal here is because it's something financially uneducated people can understand, more or less. I've seen folks here posting quality detailed explanations of other shitty market behaviors and get no replies or mods at all. But HFT? Bring on the torches and pitch forks!

                • It became associated with front running. Not all HFT uses front running and I don't think front running is illegal, but it's certainly questionable behavior.

                  There's a great book called Flash Boys that covers this in detail. One of the fascination narratives running through it is the story of the IEX, which was created partially to fight front running. There's a story about them filling a room with miles of coiled cable in an effort to slow the signal and put everyone on a level playing field.

                  • You have already demonstrated you would sell your own grandmother to avoid working. That is absolutely disgusting. You are disgusting. A pathetic excuse for a human being. May you die horribly and alone.
          • Also, while I appreciate you were not making the argument, this doesn't suggest HFTs are vastly profitable.

            • Re: (Score:2)

              by dgatwood ( 11270 )

              Also, while I appreciate you were not making the argument, this doesn't suggest HFTs are vastly profitable.

              If you get the algorithm right.

        • Re: (Score:2)

          by dgatwood ( 11270 )

          This is not the US. Argentina has short term rates above 80% (https://www.reuters.com/markets/rates-bonds/argentina-central-bank-debate-rate-hike-no-decision-yet-made-sources-2023-04-20/). Meaning in that country, you can invest and expect that return risk-free. Of course, when inflation is 100%, you're still not that much better off.

          Yeah, you're not kidding. Over five years, their Peso has lost 90% of its value. Since 2002, it has lost 99.54% of its value. So the effective interest rate is garbage when compared against any semi-stable currency. In fact, if you got a 1-year bond a year ago at 50%, you would have 50% more Argentine pesos, each of which would be worth half as much, or -20.7% APY when compared against the dollar.

          That said, even if you assume their peso's rate of decline will continue, even if you factor in that you cou

    • "Yes" is a violation of Betteridge's Law of Headlines.
  • With a sprinkle of religion for that extra bling!

  • Yes, "spirtual" development, indeed.

    • I wonder how you measure spiritual development.

      In 1907 some clown published result claiming that souls have weight. However, I don't know whether spiritual development would cause a soul to gain weight or lose it.

  • 60s/70s: Have sex and hand out flowers and beg while getting robbed.

    80s: Learn how to improve your business at our free seminar. Which runs 6 hours. Which costs a little if you stay 2 extra hours to learn the real valuable part. Which explains why you need to stay 10 more hours to learn the true techniques of staying 8 more hours to master the art of improving your business, while getting robbed*.

    *Cocaine not included.

    90s to present -- some combination thereof, with an overlay of Megachurch and Sciento

    • Don't leave out the 2010's with the explosion of right wing fascist violence and the Cult of Trump in the 2020's. MAGA is worse then Scientology and they are stockpiling guns.
  • Anyone stupid to believe that this is possible, without it being a poncy scheme, deserve to be duped.
      • So the entire country is a scam.

        • Having high inflation doesn't necessarily mean that "the country is a scam", whatever you might include in that. At least theoretically.

          If you think tolerating inflation is "a scam" because it is a transfer of wealth from savers to debtors that is not approved by , then I have some sympathy for the argument. Virtually all countries do that though, more or less. It's also bad (very) long term planning (and I'm talking civilization scale, not human) as it lessens the value of "preparing for tomorrow", among

    • Re: (Score:2)

      by znrt ( 2424692 )

      they were already duped. sects and scams specialize on these kind of people: ignorant, gullible and with money. this is one "victim" (from tfa), notice how she tries to find solace in her guilt of falling for utter nonsense by mystifying that other nonsense she had already fallen for and obviously still believes in:

      In retrospect, she feels ashamed for being swept up in the excitement. “I am a transpersonal psychologist and a bio-decoder [a type of alternative therapist], so I come from social sciences,” she said. “I should have realized I had fallen in the hands of a narcissist psychopath.”

      yeah, my lady, that was a close call, even bio-decoding has its limits! comedy gold. these people are just food.

  • Thousands of people enrolled in this foreign 'university' that will bring happiness and of course will make you filthy rich beyond your wildest imagination.
    Real universities are sending out letters to all parents to avoid their kids becoming part of this scam but still there are thousands of greedy idiots who are so willing to believe that it's all true.

    • Re: (Score:2)

      by gweihir ( 88907 )

      The greedy idiots never run out. They are doing massive damage in other areas as well.

  • The February 18, 2022 entry of Web3isgoingreat already documented Zoe was in trouble.
    "Authorities performed nine separate raids targeting Generación Zoe"
    https://web3isgoinggreat.com/?... [web3isgoinggreat.com]

  • Why has the Spanish-speaking world been so much less successful [economically] than the English-speaking world?

  • After reading literally line #1 of their pamphlet, you’re a child, an idiot, or mentally ill.

    ”educational and resource-creating community for personal, professional, financial and spiritual development”. And you have a cryptocurrency as well?

    Oh my god. Really. So, at best, you’re going to charge me $$$ for various platitudes that I could get for free from a 30-second youtube search on “self improvement”. Much more likely, you’re a fraud, a ponzi scheme, a cu

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