Magellan International Alliances recently communicated to its stake holders/investors on its operation status within the US. The crypto-affiliated firm will no longer operate with the US jurisdiction according to the announcement.
This information on face value can be interpreted to mean that the company was indeed involved in fraudulent activities within the digital asset sphere as per SEC regulations. The body treats cryptocurrencies as reg-D securities since the beginning of 2018. Founded back in February 2018, Magellan International was started with the name ‘CGI Limited’.
The firm was making plans to tap into the high revenue gambling industry through its native blockchain token ‘BetChip’. However, the approach taken by Magellan in operating BetChip & its Coinsinos casino network was not within the SEC guidelines on crypto operations in the US. As a result, the Coinsinos network was done away with as soon as April while CGI Global replaced the pioneer CGI Limited.
Later in August, Magellan International managed to make a come-back through an Alliance formed to specifically increase BetChip adoption. The firm has played safe with its corporate affairs by setting up as a Shell company in Ireland. Jeff Welch, Magellan International CEO, was operating within the US.
The latest release by Magellan International regarding US operations is below;
Magellan Intl. Alliances, Ltd., is not doing business in the U.S.A., or any of it’s territories. [sic]
Any accounts confirmed as set to U.S.A. in their profile, will be disabled, The positions are not being terminated (disabled only).
*All IP addresses in the U.S.A. will be restricted soon from logging in.
Furthermore, delays in withdrawals have been attributed to developing updates according to the announcement. This is not to say that Magellan clarified all the fundamentals owing to this inconvenience. The firm is yet to explain its action with US investors’ funds while it also did not state its reason of closing shop within this jurisdiction.
Looking at it from an analytical angle, Magellan International was probably a suspect of illegal crypto activities hence its current situation. This is because the US is friendly to SEC compliant ICOs and coin exchange platforms.
Magellan International would be obliged to provide all information to its token holders had it followed the right channels. This would enable prospective clients to countercheck the authenticity of a claimed crypto project while ensuring they indeed do as per the whitepapers.
The firm finds itself in a position where winding up business in the US is the only option since it can only show new revenue generation from the new investments. Simply put, this is how Ponzi schemes operate where old investors are reimbursed with funds from new participants.
Magellan’s operation approach does not apply to the US, other jurisdictions where the project is quite established are yet to copy the strictness and due diligence by SEC.
At the moment, US based Magellan investors are still waiting for the firm’s decision on whether they will still receive Returns on their investments as was before. The US was Magellan’s top market according to its website traffic stats that show 81% viewing from US based crypto enthusiasts.
This company has scaled its activities through an International affiliate back-office to countries like Ghana, Tanzania, Cameroon & Nigeria. Crypto Multi-level marketing companies have ventured into developing markets since 2017, a trend that is worrying as much as it is promising.
Normally, MLM firms that pull out of the United States signal a probable scam project. Luckily, investors from the US can continue with virtual addresses & offshore location addresses if they believe in a project.
We wait to see whether Magellan International will put its pen to paper by cutting off the US based cryptocurrency entrepreneurs.