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HYIPs: all you need to know about these projects

10/02/2018 00:00
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HYIP is a fraudulent project built on the principle of financial pyramid. Since 1989 to1994 the territory of CIS has been marked by the presence of large-scale HYIPs, known as «МММ». 

We have reviewed the most popular definition which does not reflect in details the essence of HYIP notion. You have to know that not all HYIPs close and cheat people. Some of them are getting transformed, get financial support and turn into highly profitable business.

Let’s take Apple company. In the first half of 70-ies Steve Jobbs, Steve Voznyak and Ronald  Wayne had been  managed to assemble manually more than two tenth of computers in order to incorporate the company and get the capital for its development.

Now it might have been hard to believe that Apple used to be a HYIP project. If to judge by the information on the year 2017 Apple takes the first place on the level of capitalization. Its general financial turnover is estimated to 850 billion USD. 

  • In order to check all the details let’s speak about the following:
  • the notion of HYIP and main meanings of this notion;
  • study the  history of first HYIP  project appearance;
  • stipulate the difference between fraud HYIP and risky investment project;
  • review main indexes of financial pyramid and speak about alternate ways of highly profitable investments.

This article final part presents the links to two useful books. One of such books is devoted to the history of MMM, while the second one is designed for the system of building of various source of profit. 

HYIP main definitions

Definition №1. HYIP is an artificially created hysteria caused by the implementation of some product. For example in 2016 users have been excited by «Pokémon Go» game.

Definition №2.  HYIP is an emotional state which arises after the appearance of some advertisement or post in media. 

Definition №3.  HYIP is an annoying internet advertisement, which distracts you from main actions. For example the time you want to see the film you are sure to see the advertisement of some casino

Definition №4. HYIP is financial pyramid, which is created for getting profit from trustful investors. The years 2005-2010 on the territory of Ukraine, Russia and Kazakstan have been marked by the operation of “Intway” corporation. Initially the company has been positioning itself as an advanced MLM structure trading with “business packages”. When pyramid collapsed more than 50000 have lost their savings.

Definition №5. HYIP is highly profitable investment instruments the investment into which is related to high risks. The main difference of investment instruments from financial pyramids is the fact that the first one is not fraudulent.

Let’s take PAMM accounts as an example. It goes about modern money funds, allowing investors to earn at the knowledge of experienced traders. The operation of all PAMM accounts is completely transparent and is in no way related to fraud. But if such project does not have smart manager all investors can lose their money.  

When it goes about HYIPs most users are attracted with the possibility to get fast profit at the account of investment into financial pyramid. It is dangerous practice which might be worth all of your savings. That is why let’s review in details why it is not worth participating at fraud projects.

The history of pyramid HYIPs

Charles Pontsi is considered to be the pioneer of the modern financial pyramids. This is an Italian thief who has brought losses to Boston citizens amounting to 3 million USD. The events had the following scenario:

  • the year 1919 Pontsi takes 200USD and incorporates company, which specializes at the exchange of various bonds;
  • the company starts working on the following scheme: users invest 1000USD, wait 90 days and get 1500USD;
  • The project had been rapidly developing and managed to attract around 7 million USD;
  • in August 1920 they have completed tax verification, which has revealed  the shortage amounting to 4 million USD;
  • This has ended at pyramid collapse, Pontsi has been left without its mansion and got into jail for 5 year. 

Bernard Maidoff has become the follower of Charles Pontsi. Maidoff has registered in 1960 the company at Wall-Street and kept cheating his investors till December 2008.  he has been sentenced to 150 years of prison by New York court.

The next large scale thief is Allen Stanford. He has been heading financial empire StanfordFinancialGroup. The year 2012 has been officially approved as financial pyramid, the investors of which lost 7 billion USD. Stanford has been sentenced to 110 years of prison. 

Pyramid HYIPs operation specific traits

Most modern HYIPs have decentralized structure and pay profit at the account of new participants and work for short term periods. They are designed for internet users and accept payments via popular e-services.

The standard option of such HYIPs is the instant payment and automated profit withdrawals. It means that they allow investors to make one time investments, fix result and make recurrent investments. As rule investors do not expect any nasty tricks, invest bigger sum and lose their savings.

There is no sole classification of HYIPs. But judging by the level of expected profit all projects can be divided into three categories: middle-, highly- and ultra-profitable HYIPs.

Middle profitable

Highly profitable


Middle existence term

From one to five years

6-12 months.

From 1 to 6 months.

Expected profit and payment frequency

Up to 15% a month.

From 20% to 60% a month.

More than 60% a month.

The operational scheme of classic HYIP can be divided into five stages. 

Stage №1. They launch new project. Project admins conduct large scale advertising campaign at financial forums and popular internet websites. At the same time they launch paid advertisement and affiliate programs, the distributors of which are sure to be related to HYIP organizers.

Stage №2.  The project becomes full of investors and increases its development pace at the account of first payments. Admins fairly distribute users profit and charge commission fee for their work.

Stage №3. Launched program is expanding, get good financing and is being actively promoted by satisfied investors. This period the investors flow is significantly expanding and achieves financial goal set by pyramid organizers.

Stage №4.  First issues related to system operation. Admins explain this by growing investors demand but in reality the organizers have already launched the mechanism of money laundering and send investors’ money to different offshore zones. In order to avoid panics the system partially restores its operation and some users manage to withdraw their money.

Stage №5. Project stops all financial payments, the project officially becomes bankrupt and organizers get all invested money to their accounts. Than follows the wave of dissatisfaction, negative feedbacks and claims to law enforcement organizations.

Generally such claims have no effect at HYIP legal documentation have notice that investment is related to high risks and organizers and organizers are not responsible for the loss of investors’ money.

If you want to know everything about pyramid projects remember to read the book titled as “Damn truth about HYIPs”. It is a free e-book, the author of which has lost all his saving and is trying to convince others not to invest in doubtful HYIPs. 

How to earn on HYIPs

Theory. Users can make money on HYIPs if they follow specific algorithm, distribute their savings between several projects and invest only free money. Find below one of the most popular instructions posted at various investment websites:

  • select several new projects which have just started their operations and can grow into rather good financial HYIPs in future;
  • keep track selected projects and wait for the moment they start to be discussed in active way;
  • this moment  the project opens optimum investment conditions;
  • select the investment plan offering money freezing for minimum possible period;
  • wait for profit payment, withdraw money and avoid from doing another investment. 

There is an entire complex of assessment characteristics allowing the thieves division into two categories: those who pay first investors and those who do not pay at all. Most of these characteristics are of conditional character, designed for novices and relate to project external attributes only.

For example if you are offered to access HYIPs based on website functionality and contact information at “Support” section. The bottom of such section should always contain the link so that users could check internet and study all existing reviews.

Practice.  The aforementioned instruction does not work. The moment when you earn about some HYIP it passes its final stage and is getting ready to become bankrupt. It means that in short term perspective any of your investments will be equal to coin throwing with 50% chance to succeed. 

If you constantly hunt HYIPs you are prone to bankruptcy in long term perspective. You will lose even in case if you manage to withdraw money from half of the projects.

No. of the project you are going to participate at

Winning probability

Expected profit

Investment sum




60% a month

100 $


+ 60 $



-100 $



+ 60 $



-100 $



+ 60 $



-100 $


180 $ - 300 $ = - 120 $

How to recognize fraud HYIP

Let’s take currently acting Bitcoins Air and check main stages

Step №1.  Ignore project marketing part and look for the section containing website Terms and Conditions. In this section most users got interested in warranties provided to investors by project admins.  For example if you decide to trade at stock exchange, the project admins will warrant you with transactions transparency and timely profit withdrawal. It means that if you do not lose your money will be ok.

Bitcoins Air website provides Terms and Conditions at “Rules” section. While “Responsibility” section contains conditions on which Bitcoins Air admins can close website and stop payments without explaining the reasons. 

Bitcoins Air website provides Terms and Conditions at “Rules” section. While “Responsibility” section contains conditions on which Bitcoins Air admins can close website and stop payments without explaining the reasons. 

Step №2. Check project investment strategy. It will allow understanding the company source of profit and how it plans providing bonuses to investors. It might look like that:

  • company collects investment capital for bulk purchase of perspective shares package
  • that the group of traders managers comes to stock exchange and sells securities at retail prices;
  • the price difference is distributed between investors and project  organizers.

HYIPs do not develop detailed investment strategies and replace them with various tariff plans. 

Bitcoins Air project does not have exact investment strategy. “About company” section contains only the information that the company sphere of activity is cryptocurrency mining and cryptocurrency trades at stock exchanges. So it is not understandable why to invest at Bitcoins Air as it is possible to buy mining equipment independently, join the pool or get registered at cryptocurrency stock exchange. Bitcoins Air is in no way related to assets trust management and cloud mining, which means that you will not get exact information about customer money spending.

Step №3. Remember to check license and other regulatory documents on the basis of which the company provides financial services. Be sure to check the reputation of organization which has provided such documents if the latter are present. If the reputation is OK remember to contact regulator managers and ask for information about the HYIP you are interested at.

Now let’s open Bitcoins Air website, the “Documents” section. This section contains company incorporation certificate copy, remitted by House Authority. This certificate stipulates that Bitcoins Air has been registered on the territory of Wales and Great Britain. 

Then, the website offers to follow the link and check registration authenticity. But general register does not contain any useful information. We have no doubts about the fact of registration we are interested who has authorized Bitcoins Air to provide financial services to the citizens. 

Let’s follow to FCA official website. It is an authority following the activity of all the companies acting on the territory of Great Britain. In order to check the company it is necessary to enter company address and search line. Search engine shows no results on such address. It means that Bitcoins Air has no license and official right to provide financial services to the citizens.

Now let’s check Bitcoins Air tariff plans. How can we rely on getting payments if the company does not provide:

  • any warranties;
  • any investment strategy;
  • any regulatory departments.

All the projects of such kind do not exist for a long time, they become bankrupts and cheat their customers. So we recommend you forgetting about easy money and fraud schemes. Never think that you are smarter than the system is and can leave any moment. This will never happen. So if you invest into fraud project remember to say good-bye to your money at once. 

Alternate option of HYIP

If you decided to take a risk and earn fast money remember to keep track the appearance of new cryptocurrency projects:

  • all of them are public ones and presented after ICO conducting;
  • ICO conducting requires thorough preparation from the team’s part: the creation of operational prototype of cryptocurrency platform, technical documentation development, good team and further development plan.

It means that you will invest in well developed technology with the potential for further growth. Together with real value of each issued token, which makes the part of each crypto project all new tokens have small initial value and are being withdrawn in a fast way to various crypto trading sites. You have to keep track new developments, select the most perspective options and make timely investments.

In case if you do not like keeping track new projects, remember to pay attention to cloud mining as a simple way to earn at cryptocurrencies.


There are no systemic earnings at fraud HYIPs as they always suppose high risk, which can be compared to playing roulette. In order to avoid yourself from the idea to invest at fraud HYIPs remember to read the book of Sergey Mavrodi “PyraMMMyd”.

This book is 18 + and reveals all the essence of pyramid business

Investment projects is rather perspective direction to pay attention. In the book of Robert Allen they belong to aggressive investment strategies, which might bring more than 100% of profit.

Each investor should read this book of Robert Allen titled as "Multiple source of income"

And what are your ideas about the investments into fraud HYIPs? Feel free to leave your thoughts

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