The Financial Services Commission (FSC) has issued an investor alert regarding a crypto-Ponzi scheme being advertised on social media, asking people to invest in digital assets called “Cloud Token Mauritius” & “Cloud Token Indian Ocean and Africa” through a mobile application called ” cloud token.”
The FSC also noted that the promotion for the Ponzi Schemes are being publicly hosted in various areas of Mauritius.
The regulatory body warned that neither of the tokens being promoted on social media has been licensed or approved by the commission. The circular released by the FSC read,
“The public is informed that Cloud Token Mauritius and Cloud Token Indian Ocean and Africa and/or any other individuals or representatives operating under these names are not and have not, at any point in time, been licensed and regulated by the FSC.”
In the circular, the committee drew the attention of investors towards Ponzi schemes that are labeled under “Multi-level marketing schemes.” The FSC defines multi-level marketing schemes as,
“Multi-level marketing (MLM) programs are usually promoted through Internet advertising,
company websites, social media, presentations, group meetings, conference calls, and
brochures. In an MLM program, an individual typically gets paid for products or services
that he/she and the distributors in his/her “downline” (i.e. participants that the individual
recruits and their subsequent recruits) sell to others.”
“However, some MLM programs operate as pyramid schemes – a type of fraud in which participants profit almost exclusively by recruiting other people to participate in the program. In a pyramid scheme, money from new participants is used to pay recruiting commissions in a variety of ways to earlier participants. They can be similar to classic Ponzi schemes, where money from new investors is used to pay fake “profits” to earlier
The FSC urged the public and investors to be wary before making investments in such programs and asked them to refer to the regulatory body's website for information regarding licensed operators.