Richmond investors warned about pyramid share scheme

The BC Securities Commission is alerting investors about doing business with this company. Screenshot

 

The BC Securities Commission (BCSC) is warning investors in Richmond about a type of pyramid scheme which sells virtual “shares.”

According to the BCSC, the B.C.-based promoters of FullCarry - which purports to be incorporated in the British Virgin Islands and based in Dubai - have held meetings in Vancouver and Richmond, and operate a private group on Chinese social media platform WeChat.

The virtual shares in so-called “split games” have been marketed and sold primarily in the Lower Mainland’s Chinese community by FullCarry (formerly known as Furuida Global or FRD Global) and International Money Tree (IMT).

The virtual shares are apparently not backed by any underlying asset, say the BCSC, and can only be bought and sold on an online portal specific to each game.

The organizers claim that rising demand will drive up the price of their shares, which supposedly never lose their overall value.

And when the price hits a certain threshold, the shares split – perhaps doubling or tripling in number and returning to their original price.

The repeating cycle of rising demand and share-splitting is touted to be the key to a lucrative income.

However, the organizers limit how many shares users can convert to conventional currency, and charge a 10 per cent transaction fee for selling them.

They focus on recruiting more participants by giving buyers bonuses for each additional person they and their recruits bring into the game.

The BCSC is concerned that these “split games” are operating as pyramid schemes – a business model in which payouts depend on the recruitment of new investors.

“Whenever someone promises high returns with little or no risk, that’s a warning sign,” said Doug Muir, the BCSC’s director of enforcement.

“These split games, like other pyramid schemes, depend on more and more people buying in. You could easily lose your entire investment.”

The games being promoted in B.C. are similar to online investment schemes that have surfaced in China and Malaysia.

The organizers of one such scheme have been sanctioned by Malaysian authorities for issuing unauthorized payment instruments.

The BCSC urges anyone who has any information about a split game, or is approached to invest in one, to contact them at 604-899-6854 or 1-800-373-6393 or to file a complaint online.

Richmond News