Yes, a very good ponzi scheme, and yes this is 100% legal and allowed in the world of EVE. Frankly this is one of the things I love about this game, it allows people to show their true colors. It's also the reason I don't play it.
Basically Eve Online is a popular 'intellectual' space MMO also known as spreadsheets online.
It's a sandbox game and CCP, who run the game, declared that scamming was OK and a game feature, buyer beware. CCP are also unfortunately notorious for bringing out half finished features, the very broken 'corporation' mechanics being one of them, and then never fixing them.
The very basic scam that's always running in the trade hub in game is 'I'm leaving the game, send me game currency and I'll send you 10x back'.
Some people love it, dedicating months on elaborate scams, less for the ISK, more for the rage that it elicits.
I too wondered if that scam really works or if it's a meta scam - in the sense that new players see this going on, assume it must be working if someone's doing it and then try to do the same scam themselves, failing and getting bored after a while. The effort is put in because of the hype, as nobody wants to talk results.
> Who are you playing monopoly with? Last time I checked you don't have to pay in real cash to get your funny money.
I'm not sure what distinction you are making. To play Eve, you need a monthly subscription. After that, you can generate all your ISK (funny money) in-game without any "real cash" payments.
This "meta gaming" (game outside the real game) is a very very important and integral part of EVE. A very popular thing to do is play as a "spy" or do those or other kinds of scams. The biggest alliances in EVE were destroyed from within by such spies.
Actually CCP is doing incredible work in terms of game design allowing a lot of freedom of how you want to play the game and also game development considering you can have more than a thousand players (more or less...) actively fighting against each other.
In terms of trying new things and advancing games and sheer depth, EVE should be far more popular than WoW which was and still is nothing new, just a clever combination of existing things... but EVE can be too damn serious to play and has way less subscribers.