Ponzi schemes are one of the oldest tricks in the financial playbook. Despite decades of headlines, legal crackdowns, and public warnings, people still fall for them.

Recently, NTC Global Trade, a crypto firm investigated by slain attorney Bouwer Van Niekerk, was placed under provisional liquidation. Several investors accused it of operating a Ponzi scheme. This comes not long after the collapse of another high-profile crypto Ponzi, Mirror Trading International (MTI).

And it Will Happen Again

When we hear about Ponzi schemes unravelling, it is tempting to shake our heads and wonder how people could be so gullible. Yet history shows that normal, intelligent people, not just the naïve or uninformed, consistently get caught.

Why?

The answer lies less in financial ignorance and more in human psychology.

The Psychology of Social Engineering

When most people think of Ponzi schemes, they picture complex financial tricks or clever accounting. In reality, there is very little financial engineering involved. At its roots, a Ponzi scheme is about social engineering: manipulating trust, hope, and human psychology to extract money.

The “returns” and spreadsheets are just props; the real scheme plays out in the minds of its victims.

The Illusion of Certainty

Humans crave certainty, especially around money. Traditional investing requires patience, discipline, and tolerance for uncertainty. A Ponzi scheme offers the opposite: an illusion of stability. Regular “dividends” or neatly printed statements showing consistent gains create a sense of control in a world that otherwise feels unpredictable. That illusion is powerful enough to override scepticism.

Wanting to Believe

People do not get caught in Ponzi schemes because they are easily fooled; they get caught because they want to believe. The promise being made aligns with their hopes, and that is often enough. Victims do not need elaborate persuasion. They are already halfway convinced because the story feels good. The Ponzi operator does not need to provide solid proof, just enough credibility for people to hang on to. Once hope takes root, doubt gets pushed aside.

Hope Over Reason

Perhaps the deepest psychological driver is hope. Whether it is the hope of retiring early, paying for children’s education, or escaping financial strain, hope can make us ignore red flags. This is not foolishness; it is human nature. When the promise of a better future is dangled in front of us, our brains are wired to lean toward belief rather than doubt.

Why They Never Go Away

Ponzi schemes collapse in predictable fashion, but they always return under new disguises: real estate opportunities, cryptocurrency ventures, private investment clubs or exotic trading systems. The schemes evolve, but the psychology they exploit remains constant. As long as humans yearn for certainty and dream of better lives, there will be fertile ground for these cons.

The Bottom Line

Ponzi schemes do not endure because they are clever with money. They endure because they are clever with people. They are not financial innovations; they are social manipulations.

People get caught because they want to believe. That is the true genius of the scheme: it only needs to trigger deep-seated human impulses.

The real lesson is not about markets at all—it is about understanding ourselves. Ponzi scams target emotions, not intelligence.

By recognizing that, we can step back, ask harder questions, and better protect ourselves from the next “too good to be true” story.

 

Written by Marius Kilian