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Sherab Lhamo
Despite the rise in new MLM scams that have defrauded large numbers of Bhutanese, the Competition and Consumer Affairs Authority (CCAA) has so far investigated and shut down 12 MLM and Ponzi schemes in the country.
These plans include well-known companies such as DXN, Enveer, Puth Group, OnPassive, Crowd-One, Megnessa, Oriens, Qnets and Enagic.
Recently, the CCAA banned four more schemes – Ripple Investment Platform, Octafx Trading Investments, Forex Guru Binary, and Phone Pay Investments.
An official from the CCAA said these pyramid schemes are often disguised as legitimate, attractive business opportunities. “Pyramid schemes are essentially elaborate scams,” the official said. “They focus on recruiting new members rather than selling actual products or services, and promise high returns in a short period of time without any evidence of legitimate sales revenue.”
These scams display complex commission structures only when individuals sign up or join the scam. “No real products or services are offered,” the official said.
Recent scams such as Octa FX, Phone Pay, Forex Guru and Ripple are similar to previously banned scams such as Puth Group, Tallwin and QNET. According to the official, these scams are designed to lure members into investing by promising quick returns but do not bring any real value to the economy or create meaningful jobs.
Recent MLM schemes, such as Octa FX, Phone Pay, Forex Guru and Ripple, operate online through websites and messaging apps such as Telegram, WhatsApp and Instagram, enticing individuals to recruit new members with attractive commissions and bonuses.
Even the illegal pyramid scheme “Puth Group”, which is popular in the country, encourages users to recruit new members to make extra money.
The CCAA investigates and bans these programs based on public inquiries, agency reports and sometimes social media alerts to suspicious activity.
Once identified as a pyramid scheme, CCAA will order the promoter to immediately cease operations and formally ban such activities.
CCAA officials said that in Bhutan, legitimate businesses, including e-commerce platforms, operate transparently and are regulated by laws such as the Trade and Industry Rules 2023 and the E-commerce Guidelines. In contrast, pyramid schemes operate in secret and are beyond the scope of these laws.
Under the Consumer Protection Act 2012, MLM is illegal in the country.
The CCAA official said all pyramid and Ponzi schemes eventually collapse due to lack of new members or government intervention. “When these schemes fail, most members lose money while the promoters make money and some early members may get back their initial investment,” the official said.
The official warned that there could be more schemes to come designed to appear increasingly legitimate and attractive.
CCAA advises the public to exercise caution and not participate in such schemes, and to seek guidance from relevant agencies if they are unsure about the legality of an investment opportunity.
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