It's no surprise at all....it's the very principle of how any Ponzi works. People are told they can withdraw freely, and many do. In a "normal" situation, every single person should be able to withdraw everything they have, and once everyone has done that the remaining balance is zero. In a Ponzi, the thing collapses when more people take money out than what is actually available. I.e, no investment actually takes place, and the "growth" which is attributed to each account is completely fictitious.
To plainly illustrate it, let's say the scheme starts taking on investors, and let's say there are 1000 investors, and each investor puts in $1000.
For the sake of simplicity, let's just say that we stick with those 1000 people and that no new investors are recruited.
So, right off the bat the investment capital is $1000000.
Now the "investment firm" claims that they start trading, and let's say their monthly compounded interest rate is 10%.
Again for simplicity, let's say that in the span of 6 months, nobody takes out their investments.
Over those 6 months the firm would indicate to the investors that each person now has a total of roughly $1770, and a theoretical total capital of $1770000, but in reality there's still only $1000000 (Assuming that the scamsters haven't taken anything out on their own already).
With $1000000 available, about 565 people could withdraw their lovely $1770 investments, but the final 435 will be left with nothing.
What do you think will happen after a year?
After a year the indicated trading capital would be around $3140000...but again, there is actually still only $1000000.
If those 1000 people then decide to start pulling out their "$3140 investments", about 320 people will get their full withdrawal, whereas the remaining 660 people are left with nothing.
So yes, people will get paid out, and many will "profit" form this....but those profits are entirely stolen by proxy from other investors.
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