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It's 8 Years Today

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  • Cardew wrote: »
    In essence it was a classic Ponzi scam.
    Oh I dunno. A classic Ponzi scam is where some punters have no chance of getting their money back.
    But Crown Currency could have worked - if the pound had strenghthened instead of weakened, and if Benstead's other business ventures had worked out as he intended.
    Partly incompetence - like importing car park hoists without checking if they were allowed to be sold in the EU. (CE Markings)
    But partly just bad luck - like the exchange rate movements.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • CardewCardew
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    Glen_Clark wrote: »
    Oh I dunno. A classic Ponzi scam is where some punters have no chance of getting their money back.
    .


    Not sure I understand your point, how does it differ from a Ponzi scheme?



    Initially everyone got their foreign currency at the inflated exchange rate CCE offered.



    The satisfied customers then spread the good news and the money came rolling in from 'investors' taking out contracts with the firm.

    But Crown Currency could have worked - if the pound had strenghthened instead of weakened,


    Generally the exchange rates were a few percent above 'the going rate' offered by other FX firms, including their forward rates; and most contracts were for months ahead - not years.


    The only way it could have worked was if Sterling had strengthened by a few percent every few months; enough to cover the outgoing payments; and importantly for Sterling to have kept on strengthening month after month, year after year.



    Without a 'white knight' to bail out the firm, new client's money went to pay contracts due for payment - a classic Ponzi scheme.
  • Cardew wrote: »
    Not sure I understand your point, how does it differ from a Ponzi scheme?
    Because Crown Currency could have worked so all the punters got paid.
    - if the exchange rates had not moved against Benstead and his other business ventures had worked.
    My understanding of a Ponzi scheme is that there will always be more money going out of the pot than there is going in, so its inevitable that some won't get paid. The one who sets up the Ponzi scheme will know that some people won't get paid. He is setting out to steal their money.
    Wheras Benstead seems to have taken reckless risks with punters money, rather than deliberately set out to steal it as with a conventional Ponzi scheme.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • baza52baza52
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    I used CCE a couple of times and was lucky to get my USD both times. From what i remember i got a good rate,
    Shame i lost it all in Vegas lol
  • baza52 wrote: »
    I used CCE a couple of times and was lucky to get my USD both times. From what i remember i got a good rate,
    Thats my point really. Rather than deliberately setting out to steal it all,
    Much of the money will have gone in paying above market currency exchange rates, and Benstead's ill-fated/stupid business ventures.
    For instance he spent a lot of money importing car hoists to re-sell. Then couldn't sell them because they didn't have EU approval CE Markings.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • baza52 wrote: »
    I used CCE a couple of times and was lucky to get my USD both times. From what i remember i got a good rate,
    Shame i lost it all in Vegas lol

    I also used CCE a few times and never really appreciated the risk. I found out about it on here. I remember one transaction giving $2 to the pound (those were the days). My final transaction was a few months before the issues started arising, I had actually convinced my mate to get his currency this way too. Would have felt so guilty had we been caught up in it.

    It certainly has made me more wary of such things and I have not taken any kind of advance contracts since. The slight increase in rate just is not worth the stress in the meantime.
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