A warning by the Central Bank of Curaçao and Sint Maarten (CBCS) regarding Quick Promo (see related story) should not go unnoticed. It came after the platform reportedly instructed participants to deposit an additional US $300 within 72 hours to verify their accounts.
CBCS said the message indirectly threatened those who failed to do so they could lose any funds already invested. It views this as a serious indication that the company may be under financial strain and potentially on the verge of collapse.
The central bank explained that payouts to existing participants in pyramid schemes are typically funded through contributions from new participants. When the flow of new money slows down, difficulties in making payouts often arise.
While Quick Promo is based in Curaçao, St. Maarten has also seen its share of similar setups. Too often those who join last end up holding the proverbial bag.
In this case CBCS had already issued a public advisory on September 17 specifically identifying QuickPromo, Korsou Legacy Capital Group and Elite Wealth Forum as examples of programmes displaying characteristics commonly associated with pyramid schemes. The financial sector supervisor of the monetary union explained that programmes involving membership payments, rewards for recruiting new participants, digital tokens and complicated compensation structures could expose consumers to significant financial losses. Now, less than two months later, the situation has apparently become considerably more alarming.
According to promotional materials, QuickPromo advertised an arrangement in which an investment of US $120 could supposedly generate US $920 over 200 days, including the original deposit. That represents an increase of almost 667% in less than seven months.
When a business venture promises unusually high returns for performing simple online tasks, recruiting new participants or making increasingly large deposits, people should ask what economic activity the money is actually coming from. Remember the golden rule: When something seems too good to be true, it probably is.
