by Golam Mowla in Dhaka Tribune, Aug 20, 2023
Once again, hundreds of thousands of young individuals in Bangladesh have lost their investments due to a scam by a multi-level marketing (MLM) company.
MTFE, an illicit online gambling and cryptocurrency trading MLM company, has abruptly ceased its operations, several investors confirmed on Friday night.
Estimates suggest that through this company, a staggering amount of at least Tk20,000 crore has been siphoned off from Bangladeshi investors using cryptocurrency.
Thousands have been lured into investing online with promises of rapid wealth by this foreign app.File photo
This Dubai-based company operated on a multi-level marketing, or MLM Ponzi scheme.
Notably, while a significant number of investors in the company were from India and Bangladesh, most were Bangladeshi, according to cyber analysts.
Inside the Scheme: Personal Accounts
Mahbub Alam, who lost around $1,50,000 and has been associated with the company for nearly two years, mentioned that there were over 400 individuals in Bangladesh holding the title of CEO affiliated with this company.
Half of these CEOs had inaugurated their offices in Dhaka, he said.
Additionally, there was a waiting list of a thousand more aspiring CEOs, and each, as Mahbub mentioned, had between 100 to 150 people under them.
Detailing the investment scheme, Mahbub Alam, himself a CEO of the company, explained that with an investment of $930, or Tk1,10,000, the company promised monthly profits of Tk45,000.
For an investment of $500 or Tk60,000, the promised returns were Tk22,000 per month.
Furthermore, if someone invested $3,500 and brought in 15 people, and if those 15 individuals collectively invested $9,000, the primary investor would earn at least Tk4,00,000 monthly.
In this way, this company turned many young individuals into millionaires.
However, Mahbub Alam expressed his disbelief over the sudden disappearance of the company, especially since “technical issues” had been cited for the past 15 days and commissions for investors had been halted.
Those who had deposited money could not withdraw it, and since Thursday, no transactions were taking place, said Mahbub Alam, adding that on Friday, MTFE completely shut down its system.
Investing a minimum of $500 promised a day-end profit of Tk5,000, enticing hundreds, with many pawning jewellery and assets to participate in it, Mahbub Alam added.
Kalam, a young investor who put Tk1,10,000 into the company a month ago, mentioned he was persuaded by someone named Akhtar to invest in the MTFE app.
“I witnessed daily profits, but have not been able to withdraw even Tk1. The company has already shut down,” he added.
Mode of Operation and Outreach
It was learned through speaking to the affected investors that along with the tempting profit advertisements on Facebook’s news feed, some young individuals promoted this app in various groups online.
Additionally, several help offices for this app were opened in Dhaka and other divisional cities.
It was also learned that these individuals took money from investors via mobile banking or Binance.
Local agents later smuggled that money abroad. Students at the SSC and HSC levels in Bangladesh were especially targeted, showing them the lure of profit.
For ordinary investors, this company’s transactions or trade was conducted five days a week, from 7pm to 1am (local time), Monday to Friday.
However, for CEOs, transactions were made six days a week, including Saturdays. Sundays were off.
Significantly, according to prevailing regulations in Bangladesh, both MLM business operations and cryptocurrency transactions are illegal and prohibited.
Bangladesh Bank’s initiatives and concerns
Bangladesh Bank, during a meeting with the Bangladesh Financial Intelligence Unit (BFIU) and various government intelligence agencies on August 10, reported that illegal online gambling, gaming, betting, forex and crypto trading have been causing an outflow of money from the country.
Expressing concern over the country losing a significant amount of foreign currency due to the surge in illegal online gambling, gaming, betting, forex and crypto trading, Bangladesh Bank decided to collaborate with all relevant agencies to tackle the problem.
The central bank mentioned that the use of digital and smart payments has increased, benefiting the entire country. However, alongside the benefits and prosperity, there has been a rise in the misuse of these banking and payment systems.
Bangladesh Bank also said that there has recently been a notable increase in illicit transactions carried out through the illegal use of digital and smart payments.
Utilizing digital payment systems, these illegal activities are facilitating money laundering processes, making them faster and more straightforward, it said.
As a result, there is a significant outflow of currency, damaging the country’s economy with considerable losses in foreign currency, it added.
Countermeasures and inter-agency collaboration
It was further stated that the BFIU, as the central institution of Bangladesh against money laundering and terrorism financing, is working with other agencies to combat money laundering through illegal online gambling, gaming, betting, forex and crypto trading.
There have been recent initiatives to halt the broadcast of online betting and gambling advertisements on various television channels, Bangladesh Bank said.
Relevant ministries have also been notified to take necessary measures, it added.
At the meeting, BFIU Chief Md Masud Biswas highlighted the damage caused by money laundering through these illegal mediums, societal degradation and the resultant harmful impacts on the youth.
He urged all agencies to collaboratively take stringent actions against those involved in these illicit activities.
The BFIU promised its support through providing information to the related intelligence agencies.
The agencies in attendance expressed their commitment to work collectively against these illegal mediums in the future.
https://www.dhakatribune.com/bangladesh/322956/another-mlm-company-vanishes-with-20-000c
