Crypto Ponzi Scheme Convictions: Key Red Flags Investors Must Know

MoneyPersonal FinanceCrypto Ponzi Scheme Convictions: Key Red Flags Investors Must KnowBySteve Weisman,Contributor.Forbes contributors publish independent expert analyses and insights. Steve Weisman writes about white-collar crime.Follow AuthorJun 01, 2026, 04:05pm EDTMug shots of Charles Ponzi, Boston financial wizard.Bettmann ArchivePonzi schemes never seem to go out of style. Back in February I told you about the conviction of Todd Burhkhalter who operated the biggest Ponzi scheme in Georgia history. More recently Rathnakishore Giri was convicted in federal court in Ohio of orchestrating a cryptocurrency Ponzi scheme and was sentenced to nine years in prison.As an aside, all these investment scams where earlier investors are paid not from the profits of the investment touted, but rather by the funds provided by later investors are referred to as Ponzi schemes taking the name from Charles Ponzi who operated an early version of this timeless investment fraud in Boston in 1920. In fact, the model for this scam was created years earlier also in Boston in 1879 by a woman, Sarah Howe who established the Ladies’ Deposit Company, a bank that took deposits only from unmarried women. Howe offered interest rates of 8% per month to the women depositing money with her, but it was all a scam, and she was convicted of fraud but never got the “credit” for being the developer of this scam that still manages to steal people’s money today.Rathnakishore Giri represented himself to potential investors as an expert cryptocurrency trader, particularly knowledgeable in the complex area of Bitcoin derivatives trading, promising lucrative returns and guaranteed profits. The truth was, however, that he operated entirely outside of the regulated securities industry, had neither FINRA licenses, nor registration as either a broker-dealer or an investment adviser. Despite his unsupported representations to investors, Giri had a long history of losing the money of people who invested with him a...