Recently I have been interested in starting my own hyip.. But in researching on how to start it i found out that ponzi schemes are illegal (i didnt know that at first..) and that hyips violate the Securities Act of 1933 and the Securities Exchange Act of 1934. I have been trying to think of a way to get around these legal issues.

First i looked up the definition of a ponzi scheme. According to detailshere.com/ponzipyramid.htm for something to be considered a ponzi scheme it must follow all three criteria:


1. You must make an investment (any money paid to enter the venture) to get the right to recruit others into the program.....and
2. When you recruit another person into the program, you receive what the law calls "consideration". That usually means money, but can be anything of value......and
3.Your new recruit must make an investment to get the right to recruit, and they receive "consideration" for getting others to join.

So that got me thinking.. If i can skip one of those or change it in some way, will it not be considered a ponzi scheme? For example what if I dont give any commission (or "consideration" as they called it) for recruiting someone? Will this make it legal?

As for the Securities Act of 1933/1934, it seem to be exempt if its a private transaction. So if you were able to prove that it is a private transaction will it be legal?

The only one way you can do it legal is to get mutual funds license or bank license, the both works for what you are planing to do.
Anyway these licenses are very hard to get, you need a minimum capital of half million dollars and there are alot of requirements.

If you need more help or information add my skype: altusfs or open our offshore website: http://www.compactheart.com

You can't take investments if you don't have it, it isn't illegal and you can be shut down or the bank accounts and company assets can be frozen.

then how come there are still so much hyips around?

Most hyips come and go so quickly that they fly under the radar. But when something gets really big (such as 12dp autosurf) it gets govt attention. To run on a small scale, you're not going to be able to do it legally, so do so at your own risk. Just my two cents worth.

There's no legal way to run one inside the US.

I'm not sure whether to agree or disagree with you. In my experience, all the "programs" I've participated in the past turned out to be illegal. I've been sitting on the sidelines for a bit waiting for something good to turn up. I think Adflexpro may be legal. I will consult with my lawyer and see what she has to say. But so far, their Terms of Service are straightforward and it appears that they can afford to pay out their rebates with their business model.

i odnt think any one like legal hyip as all are scammers mostly.

Host it in Russia

In 2004 people got around it by offering products, like Popup blocker, E-books, and Virus Scans, and stuff.. When signing up they Posted that you are buying the product and the Returns it only a bonus.. and that if the program stops paying that you were purchasing the products, and not the position.. So that was one way they got around..

LuukH,


What happened with your website ?