CRYPTOCURRENCY TRADING, ILLEGAL PYRAMID SELLING SCHEMES

Possible scams involving unregulated cryptocurrency trading and illegal pyramid selling schemes were brought to the attention of the Financial Intelligence Unit (FIU).

An entity was reported for engaging in possible unregulated trading of bitcoins whereby a group of individuals were promoting such trade on social media and online platforms.

FiU Director, Razim Buksh, said interested “investors” were provided with the entity’s bank account details, and instructed to note the first and last four alphabets/ numbers of their bitcoin wallets as the transaction narration when depositing funds for their acquisition of bitcoins.

Another entity was reported for possible unregulated trading of cryptocurrencies following an attempted remittance transaction for the acquisition of digital goods in

Australia. It was established that over 20 suspicious deposits totalling approximately $8300 were made into the reported entity’s bank account within two months.

The owner of the second reported entity was also brought to the attention of the FIU for promoting a potential illegal multi-level marketing (MLM) scheme, a type of pyramid selling scheme.

Mr Buksh said the scheme was designed to appear as a business model that provided educational programmes on financial trading, market analysis, where customers paid a monthly subscription fee of $99.

Mr Buksh said subscribers could receive commission from the illegal MLM/pyramid selling scheme if they brought in other individuals to subscribe to the scheme’s programmes.

Another illegal MLM/pyramid selling scheme was reported, which promised easy and high returns for subscriptions low as $2.

This scheme operates similarly to the above-mentioned scheme.

In January 2021, the FIU identified more than 150 potential victims of the alleged illegal scheme who conducted over 300 deposit transactions totalling approximately $9000 into one active subscriber’s local mobile money wallet.

It was also established that the active subscriber received two suspicious cash deposits of $10,000 each in 2019 and 2020, and received suspicious remittances over $80,000 from 2018 to 2021 into her bank account.