BoN warns against online investment schemes

18 Oct 2017 16:10pm
WINDHOEK, 18 OCT (NAMPA) – The Bank of Namibia has warned the public against participating in online investment schemes, as many of these schemes are not regulated and can therefore not be classified as legitimate businesses.
BoN made specific reference to an online investment business known as ‘MyLife Change 247’, often referred to as ‘MLC247’, noting that participating in the company’s schemes could result in financial losses for the public.
The company asks the public to invest funds in order to reap returns of up to 75 per cent in a period of less than six months in an almost chain-like business model. Such returns are purportedly determined by how many people join the scheme.
In a media statement issued on Wednesday, BoN Deputy Director of Corporate Communications, Kazembire Zemburuka said the central bank’s research into the business model of MLC247 has revealed that it is violating several banking laws, including the Banking Institution Act No. 2 of 1998 as amended.
“The company accepts deposits from members of the public as a regular feature of its business, and further extends these funds to other members,” Zemburuka said.
The company encourages members to participate in a referral system, where income potential is subjected to the successful direct and indirect referral of new members for which commissions are accepted as a regular feature of the business.
Zemburuka added that the company does not seem to sell any products, or if it does, it is not the main feature of the business.
“The principal feature of the business is a financial scheme and the referral system, which involves attracting and encouraging members to invest and recruit more members for commission,” the statement said.
The company has been reportedly steadily growing its membership base in Namibia, with minimum investments set at N.dollars 200.
MCL247’s use of BitCoin in its transactions is also a red flag for the central bank, as it had already warned the public against BitCoin usage in earlier communications due to possible fraud and money loss.
BitCoin, or crypto-currency, is a digital or virtual currency that uses cryptography for security. It is not issued by any central banking authority, but is rather a peer to peer system.
The BoN does not regulate crypto-currency nor the trading thereof since crypto-currency is not recognised as legal tender in Namibia.
(NAMPA)
CT/AS/ND