Many government are against cryptocurrencies, many people are sceptical about cryptocurrencies and many enthusiasts are just involved in scams that give them the mirage of easy money.
History is a teacher and our memory cannot be so weak to forget some examples in the last years such as OneCoin, Coinspace, FirstCoin, Swisscoin. All those had a coin as the “underlying asset” that was sold through the usual MLM schemes. Nothing strange in MLM, I took part myself in a strong coffee company that worked through MLM and I learned a lot.
Cryptocurrencies are just not suitable to be spread via MLM, because the market democracy and the balance between buy and sell must define the price. In MLM the bait for newbies is usually a continuously rising a price of the coin that will lead newcomers to enter the market with great expectations (and often with important sum of money).
So, here some check-points you MUST check to make yourself an idea if a project can be sane or not. Look! I am not saying that with this checkpoints you will 100% safe. Nobody is. But they will give you the visual on eventual suspicious aspects.
1 – Is a fixed earning percentage included in your money deposit?
2 – What form of contract do they offer you?
3 – What is the expected underlying business? Trading, Mining, Arbitrage?
4 – Where does the offering company have its legal base?
5 – How much are the referral percentages?
6 – Are you keeping your money into your personal account (this will require further explanations) or are you sending money or cryptocurrency to foreigners and other’s account?
If you will build your screening upon these parameters you will significantly decrease the possibilities for failure and naive loss of money.
It is the case of Arbistar that with recent admissions and public declarations shares the problems with the customers of the service. According to some websites, the CEO has created a loss of 1 billion dollar total to the investors.
How did the Arbistar scheme worked?
You had to send the money to the “global arbitrage”, where all the money was inserted in a big pot, and this money could be lost, stolen or easily moved to somewhere else.
Sending money to others represents an intrinsic risk that must be calculated carefully and some risks may be prevented thanks to the questions that I previously suggested as a preliminary screen to evaluate the business.
I am going to go really deep into these topics, eventually with some videos.
Stay updated and write here if you had some strange experience with some strange crypto-business!
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