These seemingly intelligent ‘crooks’ had ample opportunity to keep their ponzi schemes going and had no reason to bleed the golden goose dry. And it has always seemed to be that it happened in an unnatural way as if a third party (or invisible hand) accelerated the process by which the ponzi’s schemes would be dried up. Transactions were happening but there was a growing disparity between the finalization of transactions.

So what happened in both these unfortunate events is that eventually the pools ran dry. One thing we know about crime, is that greed and criminals attract more greedy criminals. So it seems then like it’s greed that brought about the criminal and immoral behaviour. The only possible explanation seems to be problems with the coherence of the individuals in regards to the groups they belonged to.īoth stories are interesting because in both pyramids schemes things seemed to be going fine and both seemed sustainable. This should be of interest because we have seemingly very intelligent individuals and seemingly very intelligent groups of people, such as lawyers, accountants, and businessman with many years of experience and knowledge. We can notice that may very well be how a common man becomes a common criminal by telling themselves that in the long run they won’t actually be stealing, since they intend on putting the money back after using it. In each case it seems likely at first the money was meant to actually be put back in the long run. Since this could be done without the customers knowledge it could be done without effecting any of them in any observable or knowable way. So then somebody (or people, perhaps the owners of each) realized they could pull out this equity and to use it in a more favorable way. For poker it was the players money they left on the sites and didn’t withdrawal on a daily basis, and for mtgox it was the bitcoin not withdrawn on a daily averaged basis.

Both models eventually started operating (apparently) like a ponzi scheme, in which the equity (or whatever we might call it) was secretly and methodically being withdrawn. We want to look at the relationship between MtGox and Full Tilt, to see the similarities between two very valuable business models that seem to be increasing in value exponentially over time. The result is, in our view, that Full Tilt does not appear to have been a Ponzi scheme, as defined.

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