Investment scams: warning signs and how to check

Every market that attracts new investors also attracts people who want their money. The pitch changes with fashion, from "guaranteed" deposit-like returns to trading bots, crypto projects and insider tips in Telegram channels, but the mechanics are old and the warning signs are the same. This guide shows how the common schemes work, how to check who you are dealing with in Uzbekistan, and what the law says about pyramid schemes.

Why scams work

Fraud rarely looks like fraud. It usually looks like an opportunity that others are already enjoying: a friend who "doubled his money", screenshots of payouts, a confident presenter, a deadline. Scammers rely on three feelings: the fear of missing out, trust in people you know, and the hope that this time the rules are different. Knowing the signs in advance is the best defence, because under pressure few people stop to check.

The warning signs

Any one of these is a reason to stop. Several together are close to proof.

• Guaranteed high returns. Real investments in shares and bonds carry risk, and their returns vary. A promise of a fixed, high return with no risk is the single most common feature of fraud. Compare any promise with the rates banks and government bonds actually pay: our guide to the CBU refinancing rate explains how interest rates are set.
• Rewards for recruiting. If you earn more by bringing in friends than from the investment itself, the product is the recruitment.
• Pressure and secrecy. "Only today", "limited places", "don't tell your bank". A legitimate firm lets you take your time and ask questions.
• Money to a personal card. A licensed firm takes money into accounts in its own name, not to an individual's bank card or an e-wallet.
• Requests for codes and passwords. Nobody who wants to help you invest needs your SMS codes, two-factor codes or the password to your brokerage account.
• Trouble withdrawing. Small early withdrawals work to build trust, then larger ones are delayed, or you are told to pay a "tax" or "unlock fee" first. Paying it only loses more money.
• Vague or foreign licences. A company that cannot show a licence from the Uzbek regulator, or points only to a registration abroad, is not one you can check or hold to account in Uzbekistan.

How a pyramid scheme works

A pyramid, or Ponzi, scheme pays early investors with money from later ones. There may be no real business at all. A simple illustration with round numbers:

A scheme collects 1,000,000 soʻm each from 100 people, 100 million soʻm in total, and promises 10% a month. Paying that promise costs 10 million soʻm every month. With no real income, the only source is new money. After ten months the scheme has paid out as much as it collected, and to keep going it needs more and more new members each month. When recruitment slows, which always happens, payments stop, and most participants, especially the later ones, lose most of what they put in.

The early payouts are real, which is what makes these schemes convincing. They are simply other people's money.

What the law says

Article 188-1 of the Criminal Code of the Republic of Uzbekistan, published on lex.uz, makes it a crime to attract money or other property from individuals and companies on promises of financial gain where earlier obligations are paid from newly attracted money, and to lead or run such an activity. The same article covers advertising it to draw in participants, including through the media, telecommunication networks and the internet. The article was added in 2016, and as of 28 September 2026 the penalties rise with the circumstances, up to imprisonment of seven to ten years for especially large amounts or an organised group.

For an ordinary person, the practical point is the advertising clause: sharing a scheme's promotional links or posts to recruit others can itself fall under the article.

Pump and dump on thin shares

Not every scam invents an investment. Some use a real one. A thinly traded share on the Tashkent Stock Exchange (UZSE) can move sharply on small orders, which makes it a target for "pump and dump".

An illustrative example: a group quietly buys a rarely traded share at around 1,000 soʻm. It then posts in chats that an "insider" expects the price to double. New buyers rush in, and because few sellers are waiting in the order book, the price jumps to 1,600 soʻm. The group sells to them and leaves. With the buying over, the price drifts back, and the latecomers are left with shares worth far less than they paid and no buyers.

Be sceptical of any tip about a specific small share, especially one that comes with urgency. Check how often the share actually trades before you act: our guide to liquidity risk and thinly traded stocks explains why thin trading cuts both ways.

How to check who you are dealing with

Brokers and investment intermediaries. In Uzbekistan, only a licensed investment intermediary can open a brokerage account for you and place your orders on the exchange. As of September 2026, licences are issued by the National Agency of Perspective Projects (NAPP), which publishes a register of professional participants in the securities market on napp.uz. The exchange lists its members, the brokers who may trade on it, on uzse.uz. Our guide to opening a brokerage account walks through the steps with a licensed intermediary.

Fund managers and advisers. Trust managers of investment assets and investment consultants appear in the same NAPP register.

Banks. If someone offers you a deposit, check that it is a bank. The Central Bank publishes the list of commercial banks on cbu.uz. Its financial literacy site, finlit.uz, also has material on recognising pyramid schemes.

Securities. A share or bond you are offered should have an issuer that discloses information on openinfo.uz and, if listed, a page on uzse.uz. An "investment" that exists only in a chat or an app has no such trail.

Check the name exactly: fraudsters copy the names, logos and websites of real firms with a letter changed. Reach the firm through the address in the official register, not through the link you were sent.

If you have been caught

Stop sending money, including any "fee" to release your funds. Keep every message, receipt and transaction record. Contact your bank at once about card payments. Report the case to the police, and if a licensed firm or its name is involved, to the regulator. Be wary of people who then offer to "recover" your money for a fee: that is a common second scam aimed at the same victims.

This article is for education only and is not investment advice. Investing in securities involves risk, including the loss of money you invest.