The Onzade Scam Explained: What You Need to Know

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  • Post published:March 9, 2024
  • Post category:Reviews

In recent months, there has been growing concern about a potential cryptocurrency scam called Onzade. With so many questions swirling around this suspected Ponzi scheme, in this detailed article we’ll break down what is known about Onzade so far and help you make an informed decision.

What is Onzade?

Onzade is an MLM (multi-level marketing) company that started operating in late 2020. They claimed to have developed a cryptocurrency trading platform where members could earn daily returns of up to 3% by investing their money.

On the surface, Onzade positioned itself as a legitimate investment opportunity in the booming cryptocurrency market. However, many signs point to it actually being an elaborate Ponzi scheme designed to enrich the creators at the expense of members.

Let’s take a deeper look at Onzade and the concerning red flags that have been raised:

Overly ambitious revenue projections

Onzade promised daily interest rates as high as 3% which would translate to over 1000% annual returns. This vastly exceeded what is realistically possible even for experienced cryptocurrency traders. No investment platform can reliably deliver these types of conservative, let alone hyperbolic returns year after year.

Lack of transparency

Onzade provided little to no details on how exactly they were generating such high yields. There was no explanation of their alleged trading strategies, track record, or specifics about the projects they were invested in. This opaque approach is a major red flag, as legitimate investment companies disclose comprehensive information to build trust.

Recruitment-focused model

Rather than focusing on its investment product, Onzade seemed primarily oriented around recruiting new members. It followed a multi-level marketing compensation structure where existing investors earned commissions or bonuses for bringing in fresh money. This emphasis on endless recruiting over performance is characteristic of Ponzi schemes.

Unregulated status

Onzade was not registered or regulated as an investment or trading platform by any financial authority. This afforded them complete lack of oversight and protection for members’ funds. Reputable cryptocurrency companies comply with regulation for security and accountability.

Unattainable withdrawal demands

Several Onzade investors reported being unable to withdraw their full funds or any earnings, citing a confusing array of reasons like “pending KYC verification” or accounts still processing. But the longer people’s money remained trapped, the more it benefited the operators. Legitimate businesses allow prompt access to customers’ own property.

So in summary, Onzade displayed all the classic warning signs of an illegitimate Ponzi scheme rather than a genuine investment opportunity – unrealistic returns, lack of transparency, focus on recruiting, unregulated status, and restricted withdrawals. Let’s explore each of these red flags in more detail.

Unrealistic projected returns

No investment comes without risk. However, Onzade promised practically risk-free returns in the range of 1000% annually which is simply not credible based on real-world experience in cryptocurrency trading and financial markets.

Professional money managers would be thrilled with average annual returns of 10-15% after fees. Even star traders struggle to consistently deliver 20-30% gains year after year due to inherent volatility. For a start-up platform to promise 3X daily interest with no bad months is statistically impossible without exposing members to enormous risk they may not fully understand.

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Many Ponzi schemes lure victims with the temptation of outsized, seemingly “easy money” only attainable through their special system. In reality, the excessively rosy projections are just a façade to attract fresh funding that allows promoters to pay off earlier investors and fuel exponential growth. But such schemes collapse once that inflow of new capital slows or reverses, dooming remaining members.

Legitimate venture capital funds are regularly audited by third parties and can back up audacious claims with proven track records, risk management plans, and full transparency about what they’ve achieved so far. But Onzade provided no evidence of successfully delivering anything close to the 1000%+ yearly returns it touted.

The simple fact is that sustainable, low-risk double-digit returns require patience, diversification, hedging, diligent research – not get-rich-quick schemes that feel “too good to be true”. Onzade’s extraordinary promises should have immediately raised major skepticism.

Lack of transparency

Building trust with potential investors requires shedding light on business operations rather than keeping members in the dark. But Onzade refused to substantiate its lofty revenue claims through any independently verifiable metrics or disclosures.

Legitimate trading firms openly share details like:

  • Allocation of invested funds across different asset classes and projects
  • Performance metrics like monthly P&L statements and average annualized returns
  • Biographies and qualifications of key executives managing money
  • Audited financial statements from reputable accounting firms
  • Explanations of specific trading strategies employed
  • Case studies and references from past clients

Yet Onzade provided essentially none of this essential transparency. Members had no visibility into where exactly their money was going or how it was supposedly generating 3000%+ annual returns.

Even just basic proof like screenshots from legitimate trading accounts would have helped address doubts. But Onzade resisted all such transparency, preferring a black box approach that prioritized recruitment over assuaging members’ rational concerns.

Legitimate investment management depends on building trust through radical transparency, accountability and independent verification. Onzade’s refusal to do so was a glaring warning sign that they had something to hide.

Recruitment-focused multi-level structure

A legitimate investment product stands on its own merits, with new customers joining primarily because of positive user experiences and word-of-mouth.

But Onzade followed an MLM structure where existing members earned commissions or bonuses, not just from trading returns on their balances, but also from recruiting others. This created perverse incentives to constantly bring in fresh money through whatever means possible, rather than prioritizing customers’ best interests.

Past Ponzi schemes like OneCoin notoriously operated on the same unethical MLM blueprint, encouraging endless warm bodies over performance or regulatory compliance. Existing members profited more from duplication of their downlines than any purported investment returns.

Authentic financial services businesses focus on providing quantifiable value to clients rather than constant recruitment. Yet Onzade seemed engineered for rapid pyramidal growth through a vector of human greed, dangling the possibility of “passive income” to recruits without delivering on it sustainably.

This predatory recruitment-first approach is a telltale sign of a scheme whose real business is exponential growth of participants, not investment returns – growth that ultimately depends on a constantly expanding stream of newer investors’ funds. When those taps run dry, as they always must, the pyramid collapses and most members lose everything.

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Unregulated Wild West status

Legitimate cryptocurrency companies register with financial regulatory bodies for accountability and protection of customers. Onzade did not seem to be registered or licensed anywhere as a money manager, broker, or investment firm.

While decentralization offers benefits, the cryptocurrency industry remains the Wild West, rife with scams that exploit this regulatory gray area. Reputable exchanges and firms obtain legal licensing where possible to operate transparently and give recourse to wronged customers.

Onzade having zero financial oversight was an enormous red flag, affording them the ability to fabricate returns, commingle funds however they pleased, cover fraudulent activities, and restrict withdrawals without consequences.

No regulatory registration meant members had absolutely no legal safeguards or recourse if Onzade ran off with their money. In contrast, licensed financial institutions must comply with rules around segregation of client assets, disclosures, conflict of interest policies, reserve capital levels and other protections.

An unregulated operation with unlimited freedom to avoid scrutiny should set off alarm bells for any prudent investor. Responsible companies welcome oversight that builds trustworthiness through enforceable standards of ethics, transparency and consumer rights.

Restricted fund withdrawals

The overriding purpose of any legitimate investment is providing investors access and control over their own money. But Onzade members reported significant difficulties withdrawing funds or profits, citing a disconcerting string of excuses from the operators:

  • Pending KYC verification processes taking weeks/months
  • “Technical issues” holding up transaction processing
  • Accounts still “processing” past stated timelines
  • Random security checks and document requests multiplying withdrawal barriers

While anti-fraud checks are prudent, institutional trading platforms process verified withdrawals promptly as a basic customer service standard. Excessive withdrawal friction is a hallmark of Ponzi schemes reluctantly parting with members’ money that they’re used to holding onto for as long as possible.

Every extra day or week Onzade could stall payouts translated to more opportunity to recruit fresh money and string along existing investors with excuses. But it prevented people from independently validating the viability of Onzade’s purported business model through cashing out.

Legitimate markets offer investors fluidity to allocate capital elsewhere according to their own goals and risk tolerance. Restricting access to funds reveals that Onzade saw members’ money not as investments but as a captive pool of liquidity to fleece until excuses no longer held water.

In summary, while Onzade marketed itself as a promising cryptocurrency opportunity, all evidence suggests it was an elaborate fraudulent scheme lacking any real trading business, sustainable revenue model or prudent operational standards. Let’s next examine some lessons from this ordeal.

Lessons from the Onzade scam

Though not all cryptocurrency-related entities end up as scams, the deceptive and unscrupulous practices of outfits like Onzade highlight some valuable reminders for investors:

  • Be wary of excessive promises: Returns exceeding 10-15% annually almost certainly involve undisclosed risks or outright deception.
  • Prioritize transparency over hype: Legitimate companies prove themselves through disclosure, not misleading promises.
  • Beware recruit-focused models: MLMs incentivize endless growth, not sustainable value creation.
  • Check regulatory compliance: Consulting records verifies compliant standards protect members’ rights.
  • Test withdrawal flexibility: Ability to withdraw proves funds’ accessibility and control.
  • Diversify carefully: Don’t risk losing everything with one questionable promoter.
  • Listen to rational skepticism: Healthy doubt avoids credulity exploited by schemers.
  • Report suspicious entities: Help authorities and others by flagging potentially criminal behavior.
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In the end, responsible participation in any inherently speculative market depends on prudent skepticism, independent verification of advertised claims, diversification according to personal risk profiles and willingness to acknowledge both opportunities and potential dangers. Onzade served as an object lesson in the consequences of ignoring such prudent precautions.

What happened to Onzade?

After mounting allegations of fraud piled up against Onzade in early 2022, the situation took an ominous turn. Their website and social accounts abruptly vanished one day with no explanation while support tickets went unanswered.

This is a common finale for exposed scams seeking to cover their tracks and escape accountability by liquidating assets and disappearing before authorities can take action. No public statements have emerged from Onzade’s operators since then.

Some estimate they fleeced hundreds of victims out of millions of dollars globally before shutting down. Unfortunately, recouping any lost funds now seems virtually impossible given the anonymous and unregulated nature of Onzade’s operations.

While shutdowns mark the conclusion of direct harm, they do not provide closure or justice for affected individuals. Authorities have pledged ongoing investigation into Onzade as part of broader efforts targeting predatory cryptocurrency schemes.

However, such crimes present challenges given their cross-border nature and tactics like using shell companies to launder funds before dissolution. Overall Onzade served as a potent lesson in both human greed and the importance of vigilance against deceptive practices in unpoliced investment sectors like cryptocurrency.

Wrapping up

In summary, while the cryptocurrency world offers promising opportunities, it remains a platform ripe for exploitation through elaborate deceptive schemes without sufficient oversight. Onzade exemplified the textbook characteristics of a Ponzi fraud operating under the guise of a trading business.

Its ludicrous revenue promises, lack of transparency, recruitment-driven incentives and withdrawal restrictions should have triggered alarm bells for rational investors. Hopefully examining Onzade’s deceptive tactics and unraveling can help others identify similar potential scams and protect themselves going forward.

As cryptocurrency adoption grows, so too will the need for enhanced consumer protections through increased compliance, verification of claims and legal recourse against wrongdoers. Until regulatory frameworks catch up globally, due diligence, diversification and caution will remain essential tools for navigating this dynamic space responsibly.

With care and prudence, the long term prospects for cryptocurrency remain bright. But its present Wild West environment leaves ample room for bad actors to harm the unsuspecting. By disseminating real lessons from failures like Onzade, communities can minimize such abuse and build understanding to mutually progress the industry’s potential for good.

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