Over the years I’ve been involved in the HYIP industry, and I’m counting
several years as just a regular investor before I ever even thought of
starting the MNO monitor, I’ve seen many changes occur. Some good, some
bad, but the industry overall has always evolved and adapted. One of the
most integral parts of the industry of course is the presence of online
payment processors, you know,
EgoPay,
PerfectMoney,
and so on. After all, the HYIP industry wouldn’t be able to function
without them. The issue I want to talk about today however is what
happens when those payment processors no longer want to accept your
business? HYIP admins as we all know will gladly take money from
absolutely anyone, no questions asked, typically using assumed
identities and disappearing without trace as soon as the game runs its
course. Online payment handlers however, thankfully, are a bit easier to
be held accountable by the authorities. No bad thing there I would say,
but it’s this accountability that has led to some serious problems for
US investors now with the legal and financial authorities in that
country casting a very close eye on their activities over this last
year.
For anyone still unaware of exactly what I am talking about here, two of
the biggest online payment processors currently prepared to allow HYIP
related websites are
PerfectMoney and
EgoPay.
Previously the single biggest processor was LibertyReserve until they
were closed down by US financial authorities and their owners arrested
by various police forces and extradited to the US. More than just HYIPs
however, LR were elbow deep in all manner of illegal activities, either
directly or by association, so it’s really no surprise that they would
eventually come under investigation. But the knock-on effect of that was
much closer scrutiny, or maybe the fear of much closer scrutiny, I
really don’t know, in other payment processors. The biggest rival to
LibertyReserve and probably the one that gained most business from their
closure was
PerfectMoney,
however they were also the first ones to take action against ending up
in the same courtroom as their former competitors. Within weeks of the
LR seizure, PM made the announcement that all accounts belonging to US
Citizens/Residents/US Companies were to be disabled. True to their word
this rule was enforced starting on the 1st of July last year, less that
six weeks after LR got into trouble.
Considering that
PerfectMoney
have some of the lowest fees in the market for online HYIP payment
services this really did a lot to curtail the options for US based
investors. The situation has now been compounded by
EgoPay,
for reasons best known to themselves, also deciding to shut down US
based accounts. In less than three weeks, March 14 I believe, US based
EgoPay
account holders will no longer be able to receive any payments into
their accounts. This is followed by a two week grace period during which
you are allowed to withdraw any funds still held on account. After
that, your account is to be permanently closed.
So why is this happening at all, and why is it happening now? Neither
processor have been exactly forthcoming with explaining the reasons
behind such radical measures, but let’s be honest here, you don’t need
to be Einstein to figure this one out. The US market is enormous for
payment processors like PM and
EgoPay,
and the amount of money it can potentially hold is probably enough to
make most people’s eyes water. To voluntarily remove yourself from a
market that big and surrender almost unlimited future earnings is not
something most businesses would do lightly. In fact from an economic and
business point of view it would be almost laughable for any other
company to even contemplate such a thing. So why are payment processors
any different? Clearly then they are very very afraid of the
consequences of of continuing in this line of work and clearly have very
good reason for believing with 100% certainty that unless they
willingly and preemptively remove themselves from the US market then US
law enforcement officers will do it for them. Tightening regulations,
stricter enforcement of existing laws, and the fact that legislators are
catching up with the technology that has always been so far ahead of
them are all playing their part here. It’s not so much that what they’re
doing was illegal, it’s that there wasn’t any law at all governing the
online payments market. Law makers of an older generation don’t really
understand the concept behind it, and so it flies under the radar until
younger more tech savvy operators take the reigns. By which time of
course technology has evolved another generation and the dance
continues!
But one thing is always guaranteed – government and big business do not
like anonymity. They prefer it if you can account for every dollar that
passes in and out of your hands, and take a cut for themselves. You
know, “wet their beaks” as the slightly smaller time gangsters than the
tax inspectors might call it. And if you are handling US currency as
most online HYIP transactions do, then the US authorities feel they
should hear about it. Whether you agree or not is your own business, I
really don’t care. But the online payment processors are concerned
enough about the consequences of being accused of enabling US residents
to earn US currency without being traced that they have decided it’s
best to back off for the foreseeable future.
The precedent has already been set with LibertyReserve, so nobody
involved in this business should be under any illusions that it can’t
happen to them as well. And to be blunt I honestly can’t say I blame the
owners of PM and
EgoPay
for doing what they did. I think I’d probably do the same, wouldn’t
you? I mean giving up a highly lucrative market can’t be easy, but when
the alternative is a very long stretch in prison then I’d do it in a
heartbeat. Their respective businesses will continue, less profitable I
guess, and probably fewer employees as well. But everyone with their
liberty in tact to carry on enjoying the no doubt still lucrative living
they can earn from serving the rest of the globe where government
agencies take a less prying interest in what private individuals do to
make a couple of extra dollars for themselves in order to feed and house
their families.
All well and good but it does very little to help the actual situation
now facing those US residents still looking to play the HYIP industry.
LR are closed, PM have taken themselves out of the loop,
EgoPay
have enough reason to believe they had better withdraw from the US
market, and STP have become far more discriminating about who they will
allow use their services. Where does that leave you, the investor then?
Like I already said, HYIP admins have no such misgivings about taking
your money, you’re free as you always were to join whatever online HYI
related projects you wish, it’s just that the channels which you can
move money in and out of these programs are starting to get restrictive.
So what are your alternatives? If the twenty something year history in
which the internet has played a major role in business and money has
taught us anything, it’s that there are ways and means of getting around
almost anything. Just like when a river flowing towards the sea hits a
mountain, it either goes through it or goes around it, but it will never
be stopped by it.
The question then is how does one get around all of this? You see I
can’t help but feel that a lot of the self imposed rules now enforced by
PM and
EgoPay
are really just to pay lip service to the authorities, to do the
absolute minimum required of them to make it simply awkward rather than
totally impossible for US residents to continue using their services. In
an entirely online business with no compulsory identification process,
how are they really supposed to know what customers are in the US and
which ones are living elsewhere? Sure, they monitor your IP address and
once they see it’s American then you’re blocked, but almost anyone with
the most basic and rudimentary internet skills can mask that very very
easily. And if you do do that, I have to say I’d be absolutely amazed if
either PM or EgoPay were to put any effort whatsoever into looking any
closer.
Before I get to the alternatives to
EgoPay and
PerfectMoney
then, let’s see what your options are if those are the processors you
would rather continue with. Accounts are free, very easy to open, and
anonymous. I mean you can tell them your name and address if you really
want to I suppose, but personally I wouldn’t. There are a number of ways
you can access your new accounts from the US while masking your
American IP address then, though be careful because some carry a higher
risk of discovery than others.
Online proxy servers for example. For anyone who doesn’t know what this
means, in simple terms the proxy is a website you visit first and then
type in the address of the site you are actually looking for. The proxy
then opens the new website for you but at all times keeping you within
the parameters of the proxy’s own website. The payment processor then
logs the visit from the proxy IP address while yours remains hidden. The
problem there however is that the proxy IP address can be fairly
random. It will change almost every time you use the service, and can
make you appear in literally any country. This includes the US, so of
course it’s only a matter of time before you start showing up there
simply by coincidence.
Another example might be to use a new internet browser that specializes
in anonymity. Most of you will I imagine be familiar with Mozilla,
Internet Explorer, Safari, and the likes seen as most likely you’ve got
one of them open on your computer right now if you are reading this.
Less well known, and I admit it’s only something I’ve started using
myself only recently, are the likes of The TOR
(an acronym for The Onion Router) web browser that protects your
identity online and allows you to surf anonymously. Handy for more than
just HYIPs by the way, if you’re as sick as I am of all the spying and
the flood of advertising we are bombarded with online from companies
like Google then it’s well worth your while downloading TOR
as an alternative browser. The fact that almost every PC and laptop
comes with a built in browser from the manufacturer tends to make most
people a bit lazy in this respect, but if you spend a lot of time
working and earning online it’s worth the couple of minutes it takes to
download. The TOR bowrser
looks quite similar to Mozilla Firefox by the way, so there’s no real
effort needed to get accustomed to using it for most of you.
Perhaps the most effective way might be the use of a VPN, which stands
for a Virtual Private Network. This isn’t generally a free service but
shop around and you’ll soon see there’s no need to spend more than about
$5 a month at most for many providers. Then rather than the random IP’s
assigned to you by the free proxy servers, you have access to your very
own secure private network and can often choose the country you wish to
appear online in. OK, it might sound a bit shady at first, but in
actual fact there are lots of people around the world using such
services for all sorts of reasons. Many national television stations
broadcast online for example, but only to IP addresses from their own
country. If you happen to be a US citizen working overseas and want to
watch HBO online for example, you can buy (well, rent) a VPN that
convinces the station you are viewing from the US. Likewise if you are
genuinely in the US but would prefer that
PerfectMoney would see you online in let’s say Australia, a VPN is a cheap and effective way of doing that.
On the other hand if you prefer not to use the cloak-and-dagger tactics and simply abandon your
PerfectMoney and
EgoPay
accounts, what are your other options? They are after all not the only
online payment processors working with the HYIP industry. Trouble is
they are definitely the two most widely accepted right now, even if you
don’t necessarily agree that they are the best. SolidTrustPay
for example has for reasons best known to themselves drastically scaled
down the extent of their HYIP related activities in recent months, and
since the new year in particular. So while STP don’t at the moment place
any restrictions on US residents operating an account, the uses an
average HYIP investor might have for such an account have become limited
recently. Which is a shame really because I myself always rated them
quite highly, and with their excellent new debit cards working so well
the options for moving money in and out of STP quickly and hassle free
have never been better. Why exactly they are clamping down on HYIP
admins so much now when opportunities for them to increase their share
of the lucrative US audience are almost limitless, it being a billion
dollar market they could practically claim for themselves if they
wanted, is something I can’t explain. But that’s the way it goes so
until they reassess their policies get over it and move on.
Likewise with PexPay.
They’ve had a reasonably good list of funding and withdrawal options
for American residents for sometime now, though the practical value of
owning an account is doubtful given that there’s almost nothing you can
use it for at the moment. I mean I have no idea what if any non-HYIP
related businesses accept them, but in this industry admins have been
slow to warm to them to say the very least. Still, it costs nothing just
to open an account and leave it dormant until you find something you
can use it for. Some users may not like the fact that verification of
your identity is required for moving large amounts of money, though you
can try it out with smaller figures easily enough without this
requirement. While PexPay don’t currently offer members debit cards such as STP and
EgoPay do, there are online exchangers such as xchanger (interviewed
here) that will move your PexPay
funds to those processors for you. Otherwise you can use bank wires,
ACH, or get paid by check mailed to your home address to get paid if you
wish.
It all looks good on the surface I must say, but ultimately it’s extremely disappointing that the PexPay administration seem to be almost entirely bereft of ideas when it comes to promoting their business. With
PerfectMoney having withdrawn from the US market,
EgoPay barely a month away from doing so, SolidTrustPay
expressing no interest in expanding their position, one would think the
potential here was obvious. Existing HYIP admins and investors alike
are going to have to come up with some alternative and fast because
programs will no longer be allowed to pay their US members via
EgoPay
from the middle of March. It’s almost like standing in an abandoned car
park, there’s a bundle of money on the ground with no one around for
miles, and yet no effort is being made to pick it up. PexPay
are we are told operating within both US borders and US law, are
especially aimed at US customers (though everyone else is welcome too,
naturally), but it would seem the people living there don’t want to hear
about it. The management of PexPay
was interviewed on MNO last October (read it here), just as the
industry was getting over the worst of the fallout from the
LibertyReserve closure, but so far the expansion promised by the admin
hasn’t really come to fruition. However if they are not capable of
stepping up their promotional work at this of all times in the
industry’s history then honestly I’d be left with very little confidence
in their abilities to run a payment processor at all.
One alternative to the more established names that US users may have been too hasty in dismissing is Payeer.
I don’t know why, but perhaps some of you think that for some strange
reason being a Russian company you are somehow disbarred from using
their services. Nothing could be further from the truth. They’re an
online business, and as such are international in nature regardless of
what country their offices are physically located in. The Payeer website is also fully available in English. Regular HYIP players will have noticed Payeer
popping up almost everywhere recently, with most of the new programs
including them as an option and older programs eventually adding them as
well. The reason behind this sudden surge in popularity is open to
debate, but my own guess is that prior to being an online payment
processor they were already an e-currency exchange service provider with
a decent reputation. As such they enter the market with a lot of very
strong features already in place, particularly with regards to funding
and withdrawal options which will suit US members. You can exchange to
other e-currencies directly from your Payeer
account which is quite useful, and also withdraw either to your bank
account or directly onto bank issued Visa and MasterCards. Other than
the withdrawal options and the growing number of HYIPs now accepting Payeer,
other advantages include total anonymity with no verification needed, a
very simple sign-up process, irreversible payments, and crucially low
transaction fees.
I am aware that some readers have their misgivings about some aspects of Payeer.
Operating from an unknown jurisdiction for example, possibly even a
close connection with the HYIP industry. I myself however can’t really
see how any of these things have ever saved you money in any other
online payment processor, the real risk being with the activities you
are using the account for rather than the medium through which you are
simply moving the money from A to B.
Lastly then we have BitCoin. I don’t really have much to say about them
for the moment for one simple reason – the point of this article is to
help US readers of MNO with the current situation here and now. I
genuinely believe that crypto currencies in general, and BitCoin in
particular, will form the long term future of the online HYIP industry,
but I’m talking about the next few years here. With almost no other
legitimate businesses using the traditional HYIP payment processors and
law enforcement agencies investigating them (or at least their
activities) very closely, I think their days in the HYIP industry are
numbered. They can either drop the HYIPs completely and go the way of
PayPal, or else close down. But there’s no long term future for them in
the HYIP industry that I can see. Circumstances have changed. If they
can’t or won’t give investors what they want then investors won’t just
walk away and forget about it. They will simply look elsewhere for
service providers that will cater to their demands, and crypto
currencies is where they will find it.
I really can’t say when the likes of BitCoin will eventually eclipse the likes of
PerfectMoney
in the HYIP industry, it may well be years, but I have no doubt that
it’s coming. To put yourself in a stronger position to continue
profiting from HYIPs then now is the time to get used to that idea and
start studying how they work. Some of the many advantages to BitCoin
include total anonymity, no centralized control for transactions
whatsoever, low fees, and the ability to fund your account via different
methods and exchangers. On the other hand it is highly volatile, with
exchange rates likely to fall without much notice as well as rise.
Indeed some might say it’s vastly overpriced as it is and can only come
crashing down in value at some point. Personally I would think that as
services like BitCoin are here to stay the worst thing that can happen
in terms of exchange rates is that it eventually stabilizes to a
realistic value. As for the legal status, well, maybe BitCoin can’t be
regulated but there are infinite restrictions that governments can place
on the companies publicly accepting it. Legitimate companies that is,
something I tend to doubt need ever trouble HYIP admins!
To conclude then, whether you agree or not with what I have written
above there are I think certain points on which we can all universally
acknowledge. One is that it’s getting seemingly harder for Americans to
participate in the HYIP industry. Another is that there are many ways to
circumvent this. The most important thing is however that HYIP admins
will collectively need to wake up to the potential that US customers
bring to the industry, and do it fast. The US market has been always the
very core of the HYIP industry, if not always in the number of
individual people involved then definitely in terms of the money being
spent. Without them it’s unthinkable that the industry will return to
its former glory in the near future. So it’s in everyone’s interests
that programs always always always go that extra mile and seek out more
ways to make themselves as friendly as possible to American users.
I was tempted to say something like “we’re coming into interesting times
for the HYIP industry now”, but you know come to think of it
“interesting times” have never really been that far away in this
business! Certainly things are changing though, which again is something
never far away. But we’ll see how the industry develops during the rest
of 2014, and fingers crossed it will ultimately prove as adaptable and
resilient as it’s always been.
I just want to close the matter now by encouraging you to share your own
thoughts on this. Obviously if you are American and directly affected
by what’s going on now your comments are most welcome, however I think
everyone should feel free to contribute no matter where you are from.
You can write to me directly, but you’re also free to leave a comment
after this article or on my shoutbox and tell us whether you agree,
disagree and why you think so. I look forward to as many different
angles to this as there are readers!
DAILY NEWS FROM THE HYIP INDUSTRY
