Following the collapse of Mirror Trading International (MTI), another South African bitcoin-based multilevel marketing scheme called Finalmente Global has shut down.
Finalmente claimed to operate a business that takes bitcoin investments from members to buy online advertising space “in bulk”.
It then purported to turn a profit on this advertising space and paid returns to members from these profits.
Finalmente structured its services in the form of loans to the company. Clients “loaned” bitcoin to the company and then effectively received interest of between 6% and 7.85% per week on their loans.
On top of these weekly returns, Finalmente also offered referral bonuses as part of a multilevel marketing scheme.
According to the Financial Sector Conduct Authority, Finalmente Global (Pty) Ltd was not a registered Financial Service Provider.
It should also be noted that the Consumer Protection Act (CPA) defines anything that offers an effective annual interest rate of at least 20% above the repo rate as a multiplication scheme.
South Africa’s current repo rate is 3.5% per annum.
The CPA prohibits anyone from directly or indirectly promoting, or knowingly join or participate in multiplication schemes.
Collapse of Finalmente
Finalmente’s announcement that it is shutting down is reproduced below.
It is with heavy heart that we have to inform you that due to the demise of MTI, we too, have lost a substantial amount of money, not only due to the investment we have/had with them but also the revenue stream of advertising.
As most of you know our business was advertising based, MTI being one of our largest clients in that aspect of our business. Due to the false impression of our association with MTI a large portion of our other clients have also cancelled our mandate.
Due to this we have lost a substantial portion of our income, as a result we are no longer lucrative enough to continue trading and we have had to retrench our staff and suspend all further trade.
This website will be suspended for an indefinite period. We will keep you advised of any further developments.
We apologise for any inconvenience caused.
Management Finalmente Global (Pty) Ltd
Finalmente disclosed that MTI was one of its largest clients and that it had an investment with MTI, which means there was an association between the two companies.
MyBroadband contacted Finalmente’s founders to further explain the statement that there was a “false impression” of an association with MTI that caused many of Finalmente’s advertising clients to cancel.
Finalmente did not respond by the time of publication.
Update: Finalmente CEO Kobus van der Merwe has responded and said that they can’t comment at this stage.
“We have forwarded this to our legal team for comment and have been advised that at we cannot comment on the questions posed, at this stage,” Van der Merwe said.