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Ten MLM crypto Ponzi schemes have been told to stop by California’s Department of Financial Protection and Innovation.
As listed in a press release from September 27, along with reviews if they have been published, DFPI has sent cease and desist letters to:
COTP, also known as Cryptos OTC Platform Limited, also known as (reviewed March 2022, collapsed May 2022)
Elevate Pass (reviewed August 2021, collapsed May 2022, and again in August 2022)
MetaFi Yielders (reviewed May 2022, collapsed later the same month)
Pegasus (reviewed May 2022, collapsed August 2022) (reviewed May 2022, collapsed August 2022)
Polinur (reviewed July 2022, collapsed August 2022) (reviewed July 2022, collapsed August 2022)
Remabit (collapsed) (collapsed)
SityTrade (collapsed) (collapsed)
Trade Sytrex (reviewed August 2022, collapsed shortly after)
Look into WorldOTC, also known as World Over the Counter Limited (reviewed August 2022, collapsed earlier this month)
Greencorp Investment, a non-MLM crypto Ponzi scheme, was also a target.
DFPI warns about the following cons
Ten of them allegedly offered and sold securities that weren’t qualified, and ten of them also lied or forgot to tell investors important things.
All of the groups are said to have used money from investors to pay supposed profits to other investors, much like a Ponzi scheme.
Each of the organizations also had a referral program that worked like a pyramid scheme.
Most people from the US who join MLM crypto Ponzi schemes do so through social media, especially Facebook, Telegram, and YouTube.
The groups promised to pay investors commissions if they brought in new investors, and even more commissions if the new investors they brought in brought in new investors of their own.
The referral programs did what they were supposed to do, which was to encourage investors to make and post content on social media sites like YouTube to get other people to invest in these companies.
The entities in today’s actions are great examples of high-yield investment programs (HYIPs).
These are investment scams that usually promise high returns with low risk and overly consistent returns, give few details about the people running the HYIP, use vague language to explain how the HYIP makes money, offer referral bonuses, allow deposits and withdrawals with crypto assets, and use social media to get attention and attract investors.
These schemes often try to take advantage of the latest investment opportunity. In the past, they have tried to take advantage of investments in oil and gas, cannabis, and other things.
The good news is that when state regulators tell people to stop doing something, federal regulators usually don’t take too long to follow.
The SEC in the US keeps track of MLM crypto Ponzi schemes and the scammers who run them. In recent years, the DOJ has also been charging more people with wire fraud and money laundering.
DFPI tells people who have been scammed by MLM crypto Ponzi schemes and their promoters to file an online complaint. The SEC, which is a federal agency, is another way to file a complaint.
