MTFE Pyramid app flops, thousands lose money in Ponzi scheme
Thousands of Sri Lankans have lost their money running up to millions of rupees following the collapse of the Metaverse Foreign Exchange (MTFE) Group’s platform this week, subsequent to a court hearing of the case of the biggest financial fraud in recent times.
Colombo Chief Magistrate’s Court imposed a foreign travel ban on five front liners of the trading platform MTFE Sri Lanka Group, on August 11 and one of them had already left the country for Dubai, UAE in the early hours of the day.
The Financial and Commercial Crimes Investigation Division (FCCID) has made submissions to the court revealing details of the pyramid scheme carried out by MTFE using the AI (Artificial Intelligence) powered trading platform for forex, commodities, stocks and crypto currency,
The Central Bank and the FCCID have informed the court that MTFE had defrauded local and foreign depositors’ money amounting to US$1 billion (Rs.325 billion) and the virtual currency trading entity has not been registered with the Central Bank.
The Central Bank’s Resolution and Enforcement Department has launched a probe into the MTFE Sri Lanka Group as the operations of this trading platform fall under the pyramid schemes system, which is prohibited in Sri Lanka.
MTFE Sri Lanka’s online presence is limited to a bare minimum Facebook page and a WhatsApp group although it has claimed that it is part of Canada’s Ontario-based MTFE Group.
Referral benefits boosted the scam’s countrywide spread, attracting thousands of rural youth to try their luck with the app.
The MTFE representatives via WhatsApp, invited individuals to join chat groups with other users motivating them to make deposits with the trading platform for lucrative returns.
Although it has registered with the Department of the Registrar of Companies, no details of its operations had been filed up to now.
Soon after the depositors’ money exceeded $1 billion, the trading platform collapsed making the account balance of all depositors to minus amounts on August 18 morning.
The modus operandi of money deposit system was a user friendly platform for any customer to join the scheme by downloading the app making an initial deposit of $30 and upwards in crypto currency units.
A depositor with an investment of $500 used to get $22-27 per day during the five day week for log in daily for an hour which will enable him to earn a quick 30-40 per cent monthly return, and invite others for even more profitable rewards.
MTFE depositors have suddenly found it difficult to withdraw funds for a couple of weeks, and observed substantial and questionable losses in their virtual trading accounts on Thursday night (August 17). Then on Friday the app showed their account balance was minus making all depositors paupers overnight, they said.
The platform used no legal transaction channel, the whereabouts unknown of its management team making matters worse for depositors.
It is a copybook Ponzi scheme – depending on new depositors to benefit previous ones and collapsing at some point. This was observed in the case of MTFE too and people should have avoided falling into this trap much earlier, a senior Treasury official said.
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