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Ponzi Schemes in the FinTech World: Emerging Threat for the Economic Globalization

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Technology: Toward Business Sustainability (ICBT 2023)

Part of the book series: Lecture Notes in Networks and Systems ((LNNS,volume 927))

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Abstract

The paper provides overview of the financial technologies (FinTech) sector and addresses some legal vulnerabilities of this emerging segment of the global economy. Complicated nature of the FinTech sector is explained – from mobile payment applications to complex blockchain networks containing encrypted transactions. Aside from numerous advantages of the FinTech services, issues related to fraudulent practices in this sector of economy are discussed at length. In particular, it is argued, with reference to the two major Ponzi schemes of the past, that financial pyramids are types of illegal enterprises, which can infiltrate legitimate financial technology industries. Through the lenses of the relevant Ukrainian law and practice, the complicated nature of illegal financial pyramids, in particular the absence of meaningful definition of this type of fraud, proposals are elaborated on how to improve national financial market regulation. Based on research findings, the key idea of the research is formulated: in some cases there is a potential link between modern financial technologies and fraudulent schemes related to financial pyramids. Such disturbing realities should trigger more aggressive legal response by national lawmakers and regulators.

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Author information

Authors and Affiliations

  1. National Academy of Security Service of Ukraine, 22 Mykhailo Maksymovych Street, Kyiv, 03022, Ukraine

    Andrii Cherniak

  2. Department of Criminal Law Policy and Criminal Law of the Educational and Scientific Institute of Law, Taras Shevchenko National University of Kyiv, 60 Volodymyrska Street, Kyiv, 01033, Ukraine

    Oleksandr Dudorov

  3. Department of Law, Berdyansk State Pedagogical University, 66 Zhukovskoho Street, Zaporizhzhya, 69600, Ukraine

    Dmitriy Kamensky

  4. Department of World Economy, State University of Trade and Economics, 19 Kyoto Street, Kyiv, 02156, Ukraine

    Igor Fedun

  5. National Academy of Security Service of Ukraine, 22 Mykhailo Maksymovych Street, Kyiv, 03022, Ukraine

    Yevgen Buryak

Authors
  1. Andrii Cherniak
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  2. Oleksandr Dudorov
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  3. Dmitriy Kamensky
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  4. Igor Fedun
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  5. Yevgen Buryak
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Corresponding author

Correspondence to Dmitriy Kamensky .

Editor information

Editors and Affiliations

  1. Middle East Technical University, Kalkanlı, Türkiye

    Bahaaeddin Alareeni

  2. College of Business of Finance, Ahlia University, Manama, Bahrain

    Allam Hamdan

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Cherniak, A., Dudorov, O., Kamensky, D., Fedun, I., Buryak, Y. (2024). Ponzi Schemes in the FinTech World: Emerging Threat for the Economic Globalization. In: Alareeni, B., Hamdan, A. (eds) Technology: Toward Business Sustainability. ICBT 2023. Lecture Notes in Networks and Systems, vol 927. Springer, Cham. https://doi.org/10.1007/978-3-031-54009-7_40

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  • DOI: https://doi.org/10.1007/978-3-031-54009-7_40

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-031-54008-0

  • Online ISBN: 978-3-031-54009-7

  • eBook Packages: EngineeringEngineering (R0)

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