Warning: Multi-level marketing of virtual currency has appeared in Nghe An

(Baonghean.vn) - Through verification, the purpose of virtual currency traders is to attract people to participate in a disguised multi-level marketing form, which can easily cause financial losses to participants and cause consequences for society.

New variation of "dirty" multi-level marketing?

From Thai Hoa town, a newspaper reader reported: “Currently, in Thai Hoa town, there have appeared a number of people participating in buying and selling virtual currency Bitcoin. They said that if they only invest an amount of money of about 10 million VND, after a year they will definitely receive an interest rate of up to several hundred percent. I think this is a type of “dirty” multi-level marketing that needs to be stopped soon, otherwise it will be difficult to predict the consequences for the people…”.

Flyers and invitations to the Onecoin virtual currency business seminar kept by Vinh City Police.

Present in Thai Hoa town, we were confirmed by a security officer who said that through investigation, an individual was discovered to be trading in Bitcoin virtual currency. This person's name is D., born in 1981, residing in Quang Tien ward, working as a cosmetics marketer. Up to now, D. has attracted 11 people to participate in investing.

D. operates irregularly, mainly providing consultation to participants at coffee shops, often enticing participants to enjoy profits of up to 144% per month.

In Vinh City, from the end of July 2016 until now, the police force has also discovered a number of companies, organizations and individuals organizing virtual currency business seminars at hotels in the area such as: Saigon Kim Lien Hotel, Vinh Plaza Hotel (July 30); Giao Te Hotel (September 18) and Muong Thanh - Phuong Dong Hotel (October 19).

In particular, the “workshop” at Muong Thanh - Phuong Dong Hotel, organized by Mr. D.HH - a member of Winbig Human Resources Training and Supply Joint Stock Company (headquartered at 232/17, Cong Hoa Street, Ward 12, Tan Binh District, Ho Chi Minh City). Despite being at the time of floods, the “workshop” still attracted about 250 people from the provinces of Quang Binh, Ha Tinh, Nghe An and Hanoi to participate.

According to a scout who infiltrated the “workshop”, the propagandists of the virtual currency Onecoin replaced Bitcoin because “the Bitcoin virtual currency exchange was hacked and a large amount was stolen”. They talked a lot about the development trend of the currency; the history of Bitcoin and the future of Onecoin; gave predictions of the price of Onecoin in the next 18 months and gave instructions on how to invest. Then, they introduced people from Quang Binh, Ha Tinh, and Hanoi – who were successful investors – to speak.

According to the promotional leaflets at Onecoin virtual currency business seminars, if you invest in a package of 16 million VND (there are 4 packages from 16 million VND to 148 million VND), you will be given 500 Onecoins. This Onecoin amount will be doubled after 2 months of participation, if converted to about 24 million VND; and so on, accumulated over time accordingly.

Not only that, investors also enjoy huge "commissions" if they attract new members to join. Onecoin business participants are divided into 4 levels and enjoy progressive profits. People at levels 1 and 2 will receive 10% of the investment price, level 3 will receive 20% and level 4 will receive 30%...

Bitcoin virtual currency.

Understand virtual currency correctly to avoid falling into multi-level marketing traps

In fact, Bitcoin is not inherently bad and is not necessarily associated with dirty pyramid schemes. Bitcoin is a form of virtual "currency", or more accurately, "cryptocurrency", issued using complex algorithms, ensuring that it cannot be counterfeited. This currency is not recognized and protected by countries around the world, but is still accepted by some businesses for transactions, mainly via the internet.

After the Bitcoin exchange crash in Japan or Hong Kong a few years ago due to hacker attacks and stolen codes, the value of Bitcoin has slightly decreased (currently fluctuating around $700/coin). This currency is still popular with many people because it allows direct transactions between owners without going through an intermediary system, so there is no fear of being traced. At the same time, the number of Bitcoins issued is limited, so the more people participate, the more scarce the currency becomes, the higher the value is pushed up. A form of investment relatively similar to foreign currency investment or stock trading.

So how do dirty pyramid schemes take advantage of Bitcoin to make illegal profits? Contacting many Facebook users who posted on their personal pages photos of receipts for transferring "profits" from investing in Bitcoin, we were introduced to "guides" with the instructions "Remember to say that you were introduced by friend X."

As a new player who knows nothing about Bitcoin investment, we were immediately instructed on how to create a Bitcoin wallet on the international website Blockchain (the most reputable Bitcoin exchange today). The gameplay seems simple: Buy 1 Bitcoin from the Blockchain website or buy directly from the instructor, create an account on the trading floor introduced by this person and then deposit your Bitcoin into the exchange's common bank. Then every month, just "open your mouth and wait for the fruit to fall into your mouth", receiving a direct transfer of 30% interest for 10 consecutive months.

This person also appeared very eager: "You send me your ID number, phone number, email, then transfer me 15 million 900 thousand VND and I will create a wallet, buy Bitcoin, create an account for you. You just need to sit and wait to receive the interest."

When we asked: How does this model work? Why is the interest rate as high as 30%, this person avoided: "If you have idle money, then play. If you invest at this time, you will have your capital back in just 1 month". Along with that was the invitation to invest in Aurius - a coin issued by this trading floor, completely unrelated to Bitcoin and promised to "Increase in price every day, buying and selling will only bring big profits".

On the introduced website, right at the top of the page it states "This playground is not a multi-level marketing business", however the introduction about the activities of this site uses words that "smell" of multi-level marketing such as: Our historical mission is....; Here we Empower the community - End poverty.

A Bitcoin "give and receive floor" in Vietnam operates according to a multi-level model, and has been named in many articles warning of fraud.

According to the information on this page, this community has appeared in Malaysia, Indonesia, Singapore, Philippines, China, Vietnam and aims to cover more than 100 countries in the world by 2020. Although it advertises itself as an international networking community, this page has a very sketchy design and elementary English spelling mistakes.

It is worth mentioning that when players deposit their Bitcoins into this so-called "community bank", they have made a virtual currency hand-to-hand transaction - this transaction cannot be traced and is not protected by anyone in case of loss or fraud. The 30%/month interest rate is actually just a small amount of money deducted from the original real money used to buy Bitcoin. This form seems similar to "playing a savings account" or lending at high interest rates.

In fact, the players we contacted all said "Still not getting their money back". In addition, the attractive promise of Aurius coin has made many people "blind" and pour money into it, while this coin is not even known to the international community but only "follows" Bitcoin.

Speaking to us, Deputy Chief of Vinh City Police – Lieutenant Colonel Pham Vu Cuong said: “Through the investigation, we have determined that this is a form of multi-level marketing that can easily cause financial losses to participants and social consequences. We have advised the city leaders to issue documents directing departments, organizations, and authorities of wards and communes to take measures to prevent and handle business activities of virtual currencies Onecoin, Bitcoin…”.

On October 28, 2016, Vinh City People's Committee issued Official Dispatch No. 6131/UBND-CA on preventing and handling Onecoin cryptocurrency trading activities in the city. Here, in addition to thoroughly analyzing the methods and tricks of organizations and individuals involved in virtual currency trading activities, Vinh City People's Committee proposed many solutions to direct departments, organizations, and ward and commune authorities to take action.

Ha Giang - Tien Hung - Hai Trieu