HYIP stands for High Yield Investment Program. HYIPs are purported investment programs normally offered via the Internet. HYIPs typically accept investments of $100 or less while promising high returns. The introduction of e-currencies such as e-gold and StormPay (although almost all HYIPs do not use StormPay as of February 2006, see StormPay article for why) has made it easy for HYIPs to operate across international boundaries, and to accept large numbers of small investments.

No HYIP has, as yet, survived for very long without turning out to be a scam. Scam HYIPs are Ponzi schemes, in which new investors (usually unwittingly) provide the cash to pay a profit to existing investors, which they could then withdraw leaving nothing to pay the new investor. This approach allows the scam to continue as long as new investors are found and/or old investors leave their money in the scheme, known as compounding (because even higher profits are promised).


The largest HYIP scam that has ever existed is PIPS (People in Profit System or Pure Investors)[1], [2]. The investment scheme was started by an engineer, Bryan Marsden, in 2004 (according to the Wayback Machine record of http://pureinvestor.com) and spanned more than 20 countries in the world.