What is HYIP?

by Kevin Berry
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Probably each of us has at least once received an offer of quick and big earnings on the Internet. However, we bet that you don’t know investors who could enrich themselves by hundreds of percent in a matter of days. That’s right, because, as we keep saying, there is no free lunch. Often, under the offers of high returns, various HYIP projects and investment scams are hidden. As a result, the victims they lure into their hands not only do not earn but also lose their investments. It can be difficult to distinguish such scams because they can even hide under the guise of a reliable investment project. Don’t worry, we will help you. So, what is HYIP? Is it possible not to lose your capital in this kind of investment?


What Is the Meaning Of HYIP?

HYIP literally means a High-Yield Investment Program. As the name implies, in this program you are offered to invest money at a high percentage. Moreover, the profit here is much higher than if you just carried money to the bank. In truth, even on low-income HYIPs, you can get much more than in any other place. By the way, HYIPs are divided into low, medium, and high-yield. The latter really astonishes the imagination.

In such scam programs, you can be promised hundreds of percent of your income in just a few days. However, do not think that you will quickly become a millionaire here. Every year, investors lose billions of dollars in these scams. In general, the average amount of money that people have left there has long exceeded $3 billion per year.

What is HYIP

Besides, HYIP usually offers much shorter-term investments than other projects. According to the terms of deposits, they are also divided. You can meet short, medium, and long-term HYIPs. However, even though they are called long-term, the term of investments in such scam projects is only a few months. In other cases, we are talking about days and weeks in general. So, we have already realized that the main principle of HYIP is the promise to earn a lot and quickly. Let’s take a closer look at how this scam works.

The Mechanism of Work and Examples of HYIPs

Almost a century ago, there was a man named Charles Ponzi. And one day he decided to emigrate from Italy to America. On the way there, he lost all his money and arrived in the US with two dollars in his pocket. For almost two decades he had not been able to improve his financial situation, until 1919.

One day, Charles received an international reply coupon from a businessperson. The Universal Postal Union established that coupon in exchange for postage stamps. Ponzi found out the conditions of coupon circulation. Then he found that the ratio of exchange rates allowed coupons to be resold profitably in the USA.

He established an entire company for this purpose, The Securities and Exchange Company (SXC), and attracted several investors to finance this scam. In exchange for a promissory note, Ponzi promised all depositors 50% of the profits from transatlantic trade in a month and a half. This significantly exceeded similar payments from other issuers of securities.

Of course, it was a scam and Ponzi was not going to buy coupons. He knew that the international reply coupon could only be exchanged for postage stamps, not for fiat money. In this case, coupons were not suitable as a tool for speculation. Interestingly, this information was not even a secret. If investors wanted, they could easily find out that. Nevertheless, the scam scheme worked. In July 1920, Ponzi was selling his promissory notes for up to a quarter of a million dollars a day.

Ponzi scheme

However, one day a man came who demanded 50% of the profits of Charlie’s company. This lawsuit allowed him to freeze all the money in the company’s accounts and conduct an investigation. It turned out that Charles had not invested in anything. He simply paid depositors money at the expense of investments made by new members of this financial pyramid. Afterwards, such a scam scheme was called the Ponzi Scheme. And it exists to this day.

We can no longer imagine our life without the Internet. So, the Ponzi scheme simply migrated to the online space. Do you know where it is most often used? Yes, in HYIPs. All of them work because they constantly generate an influx of new users. Thus, old investors are paid profits at the expense of new investors. 

You’ve probably even heard of a couple of high-profile scam cases. For example, ZeekRewards, which was called the largest scam in history. ZeekRewards attracted customers for two years thanks to the Internet promotion of multi-level marketing and auctions. They promised quick and solid profits in the face of the difficulties of the Great Recession. When ZeekRewards collapsed, more than 700,000 people lost more than $800 million.

Today, the creators of HYIP are mastering new technologies. As the popularity of cryptocurrencies grows, more and more projects and scams are based on this concept. For example, we have already written that 90% of all tokens issued today are scams. Investing in cryptocurrency is the most attractive field for current fraudsters.

There are other interesting schemes. Surely you have heard something about Prime Bank programs. Fraudsters in this case claim that they will use your money to trade financial instruments of the Prime Bank category. They say they allegedly have access to secret foreign markets. Therefore, the operations they carry out there with your money will help you get rich. In fact, neither these Prime Bank instruments nor the markets on which they are allegedly traded exist.

Prime Banc scam

The organizers of this scam very often advertise in social media, newspapers, etc. They don’t always explicitly call their schemes the Prime Bank. Regardless of the name, the main idea of such a scam is trading in international financial instruments. At the same time, you may be offered more than 100% profit and told that the risks are minimal. Of course, this is all nonsense.

HYIP Characteristics

You don’t want to invest in an HYIP and eventually lose all your money? Then you need to learn how to recognize this type of scam. Why do we say that you will lose your capital as a result? The problem is that all Ponzi schemes collapse sooner or later. Only the creators can earn money from them. Everyone else is just taking a risk. So, how to spot a scam?

High Yield

The main sign of any scam project is a high yield. Do you really believe that you will give someone money, and these people will earn you 100, 200, 300% per annum just like that without additional conditions? If someone really had such knowledge and technology, he/she would never share this secret with ordinary users.

Unknown Source of Income

This paragraph follows logically from the previous one. Think about how it is possible to earn 100, 200, 300% of your income. You can say that it is all thanks to crypto HYIPs. However, we are here to disappoint you. There are bad times in the cryptocurrency market. Mining is unprofitable, cloud mining pays off for a long time; new coins and tokens are scams in 70% of cases. Should we continue?

Improbable legends are the main features of the scam HYIP. Ask its creators for confirmation that they are actually investing money in something. However, if you don’t want your account to be blocked the next day, it’s better not to ask them. By the way, such scam projects sometimes do not even hide that they are not investing. In the user agreement, they write that they do not accumulate money, but simply redistribute it between the project participants. See, it’s a classic scam Ponzi scheme.

Legal Information

Sometimes HYIP can pretend to be a real company. Some scams have no legal information at all. Usually, the administration of such projects simply creates one site and immediately offers to invest money. What is an HYIP website? Usually, it’s a poor landing with a lack of content.

However, working with finance is a licensed activity in all states. To legally accept money from depositors, the project must necessarily have a registration in some state and often must have a license. And only banks can guarantee your income at all. Moreover, this practice is accepted in almost all countries. So, before you transfer your funds to an anonymous company, check whether such one exists. Also, check whether it has the right to promise you something.

Management and Team

Of course, if such a scam project has bad intentions, it has absolutely no need to disclose information about its employees. Therefore, in HYIP, CEOs often remain unknown, as well as the team of employees. Advertising their services, they may even be called themselves by other names.

Do you know what else is funny? Sometimes such third-rate scam projects post photos of fake directors and employees on the site. They are all similar in one feature; they were generated by a neural network. Go to the website thispersondoesnotexist.com and see for yourself that it is a matter of two minutes to create such an employee. If you spend at least 20 minutes of your time learning to recognize how to spot fake images, you will definitely save yourself money in the future.

Affiliate Program

HYIP needs to somehow invite new customers and pay other investors money. Therefore, an affiliate program comes into play. Scams and Ponzi schemes always have it. This is the basis of the whole project. And often by inviting new users, you can earn even more than in the project itself.

More and More Anonymity

Real companies that have nothing to hide easily disclose their details for depositing. HYIPs and other scams usually accept payments only in cryptocurrencies. The more anonymity there is, the better. Moreover, you cannot return the cryptocurrency from this scam using the chargeback procedure.

Period of Existence

As we have already mentioned, HYIP is most often a short-term program. Pay attention to the date of creation of such scam projects. Check the domain registration date. Check when the company was incorporated (if it was incorporated).

How to Spot a High-Yield Investment Program?

To identify HYIP, just follow the above-mentioned signs. If all or several of them match, then bingo! You’ve probably found a scam. You can also pay attention to HYIP monitors. What is an HYIP monitor? It’s a special portal that contains information about many projects. Also, they keep statistics on such projects. In particular, they usually react promptly if the HYIP has turned into a scam. Then they notify their users that it is not recommended to invest there. And of course, follow the reviews of real users on the web. If the project is not conscientious, investors will quickly talk about it.

How to Invest in HYIP Safely?

As you can see, investing in HYIP scams is very dangerous. At any moment you can be left without your money. Despite this, many investors believe in their luck. Perhaps they hope that they will be able to withdraw money from the project before it closes. However, it is impossible to predict when this will happen. So your funds in an HYIP are always at risk.

Is there any way to invest in HYIP safely? The answer is unequivocal, no. However, you can try to increase your chances of success.

  1. Always keep an eye on HYIP monitors and always choose a project that pays.
  2. Choose projects with plausible legends.
  3. Don’t chase high returns. The higher you are promised a profit, the faster the scam Ponzi scheme will collapse.
  4. Try to keep track of all the negative reviews on the web. As soon as there are too many of them, in your opinion, immediately withdraw the money.


Is HYIP Investment Legit?

No, it is not legit. The fact is that Ponzi schemes, based on which these projects work, are prohibited in almost all states. HYIPs usually do not bother to create an official company or obtain an investment license. They just want your money. So, they do not invest these funds and work without any supervision of regulators.

How Does HYIP Work?

HYIP works based on a Ponzi scheme and always exists only at the expense of new customers. The profit is paid to investors from the deposits of their referrals. By the way, there are several levels of such projects. For example, an unambiguously fraudulent short-term HYIP usually immediately gives loud advertising on social media. It attracts the maximum possible number of customers and closes quickly. Also, there are longer-term projects. They are gradually increasing the volume of advertising and have a multi-level affiliate program. This allows these scams to exist for several months to a year. Finally, an outstanding scam Ponzi scheme can exist for several years. The payouts here are much smaller, and the administrator can reduce them even more if he/she sees that the influx of depositors is weakening. During this time, administrators will prepare the next HYIP. And they still leave with your money at the end.

What Is the Highest Yielding Investment?

Even though HYIP offers high returns, the risk of losing money here is much higher than earning something. Therefore, it is better to pay attention to other ways of earning. For example, you can invest in stocks, or any other stock market asset at all. Investing in cryptocurrencies will not give you a profit tomorrow, but in the long run, it will bring a good yield. Finally, you can engage in trading, which is considered one of the most profitable activities. You can also choose other directions, such as venture investments, or real estate.

What Is the Best HYIP to Invest in Right Now?

There are just a huge number of HYIPs. It is impossible to check everyone at the same time. Even tracking a few HYIP monitors, you still won't get the full picture. You can find some HYIPs on our website. However, it is better to pay attention to other ways of investing. For example, you can get acquainted with our list of brokers and investment companies and possibly decide on cooperation.

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