A Ponzi Scheme, also known as Pyramidal Scheme, is an investing scam promising rates of return with no risk to investors. The Scheme will eventually generate returns for the early investors by the acquisition of new investors.
When the new investors are not sufficient enough to pay for the returns of the old ones, the project will fail, and the founders will exit with investor’s money.
This form of scam is the easiest to spot, but many people still fall for it. They often actively encourage you to recruit new investors and always promise a fixed return rate. The most famous Ponzi scheme in Cryptocurrency was Bitconnect. You can read more on this article: https://totalcrypto.io/bitconnect-scam/