A Ponzi scheme is a type of investment fraud that promises high return rates with limited risk to investors. In fact, returns for early investors are generated from the money taken from later investors. Therefore, the scammers must continually recruit new investors and discourage current investors from cashing out to keep the scheme going.
Ponzi scams inevitably crash when the influx of new investors dries up, and there isn’t enough money to pay earlier investors who want to withdraw their cash. Be wary of any investment opportunity that guarantees big profits with minimal risk and don't become financially involved with an unlicensed investment professional.