de | cn | ru

Market News

Swiscoin Review - is it scam or safe?

Jul 13 2017
By
Jonathan Smith

SwisCoin is allegedly a cryptocurrency, with some very specific twists. The company has combined a typical cryptocurrency offering with an MLM scheme, aimed at attracting new investors. This immediately raises doubts, as there are multiple examples of similar business which turn out to be a total scam, much like some off-shore forex brokers.

It should be noted “Swiss Coin”, spelled with a double “s” is a clone of this already dubious sounding cryptocurrency. We will not touch on them in this review.

 

What is SwisCoin?

 

In essence, SwisCoin is just another cryptocurrency. There are several interesting specifics about it though.

First of all, the project attempts to attract new investors via a MLM scheme. The idea is that users have to convince others to join the firm, registering “under” them. This type of business practice often leads to the creation of Ponzi Schemes, although some of its previous iterations were very successful for the early adopters. SwisCoin is by no means the first cryptocurrency to adobt this strategy, as OneCoin (which Asutralian financial regulators recently issued a warning against) is probably the most famous one.

The second key characteristic is that, albeit a cryptocurrency the entire SwisCoin project appears to be very centralized. There is a single company, with which you have to deal. This is not the case with other forms of digital cash.

Finally and this is the really interesting part, the company you invest in, offers to buy-back your coins. This is probably the most dubious aspect of SwisCoin, which we’ll get to in greater details below.

 

How it works?

 

One can invest in SwisCoin via purchasing a “package”, which contains mining tokens. He has the option to wait for these tokens to “split”, allowing him to mine even more coins. Here is a summary of the packages currently available:

 

Account name Price Number of Tokens Number of Splits
Beginner $100 1,000 One
Seller $500 5,000 One
Pro Seller $1,000 10,000 One
Express Seller $3,000 35,000 Two
Platinum Seller $5,000 70,000 Two
Premium Seller $11,000 160,000 Three
Ultimate Seller $25,000 400,000 Four
Master Seller $50,000 900,000 Four
Pro Master Seller $100,000 200,000 Five

 

The number of tokens you receive is not equal to the number of coins you would be able to mine. The ratio is determined by the mining difficulty. The number of splits indicates how many times your tokens can literally split into more tokens. These events occur once every few months and are planed by the company. It may be hard to judge if one should instantly start mining or leave his tokens to split the maximum number of times before doing so.

 

Here comes the really shady part of the equation – after investing, receiving your tokens and you don’t later mine them – the company does that for you. You would then receive coins, which you can trade on exchanges, just like any other cryptocurrency, but you could also … sell them at an “internal exchange”, where the company buys them from you at a predetermined price. This makes them a market maker, of sorts. The internal price is currently multiple times higher than the ones offered at the real exchanges.  Think about this business model for a minute. You give someone money, they give you something in return and then they buy that thing back from you for even more money. It makes no sense at all.

SwisCoin claims this is not the main purposes of the investment scheme. Clients (or partners) are encouraged to keep their coins for the long term. A few limitations are set in place, to prevent people from quickly cashing out: one can sell a maximum of 5% of their coins on the “internal exchange” per day and withdraw only 2% of their cash balance per week. Although this stops the whole thing from falling apart, it does reiterate the point the entire project feels similar to a Ponzi scheme.

 

Is there a blockchain at all?

 

After realizing how this mechanism works, some of you may be asking themselves is there any block-chain involved at all? The short answer is yes, there is. As mentioned above, SwisCoin can be traded on a few cryptocurrency exchanges (which operate similarly to a ECN forex broker), where the price is much lower than the one provided by the company. That being said, you can not make an arbitrage trade between the two, as the company only buys back coins, which you have obtained via one of the packages. 

The SwisCoin blockchain has a public ledger, which reveals the biggest owners of the currency are relatively few. Here is a screenshot of the ownership:

 

An MLM scheme?

 

The MLM aspect of SwisCoin is the first thing which will alert most people against the currency. Althoughthis model has worked for several cosmetic and nutrition companies in the past, when it comes to purely financial products, most people are skeptical. The particular scheme, provided by SwisCoin includes a 10% commission on people you refer directly and different percentages on people who are registered below them. Again, this practice is considered shady in finance, as the payments are made in advance of any actual gains by the referred person. There system implemented by SwisCoin has two branches which impact the payments one would receive, but we will not get into the details.

 

 

Conclusion

 

SwisCoin is a company, providing a cryptocurrency, which is being funded by an MLM scheme. The recent crypto-hype is apparently something whch many people have caught on to. Unlike other currencies, like Bitcoin, which proudly state decentralization as a main advantage over the central bank-dominated fiat money, SiwsCoin is very dependent on the company behind it. Investing (via the packages) currently relies on the fact they will pay you back more through their “internal exchange” (which has limitations on trading and withdrawing). SwisCoin can also be traded on several external exchanges, where you can currently obtain a large amount of coins for far less than what you would need to pay for a package. That being said, you can not buy coins on external exchanges and sell them back to the company.

We can not definitively conclude this is a Ponzi Scheme, although it has many aspects of one. SwisCoin does appear verry similar to OneCoin.

TAGS: swiscoin  swiscoin review  swiscoin scam  swiscoin mlm  swiscoin ponzi scheme  swis coin  swis coin review  swis coin scam  swis coin mlm 
Forex
Broker Country Regulation Platform Min Deposit Review
Cyprus, UK, Mauritius CySec, FCA, FSC MT4, MT5, Web $10 Review Website
Cyprus, SVG CySEC MT5, Web,
cTrader
$100 Review Website
Australia, Cyprus ASIC, CySEC MT4, MT5,
IRESSTrader
$100 Review Website
Cyprus, Australia CySec, ASIC MT4, MT5 $5 Review Website
UK, Australia, South Africa FCA, ASIC, FSCA MT4, Trading
Station,
NinjaTrader
$50 Review Website
UK, Cyprus, UAE, South Africa FCA, CySEC, DFSA, FSB MT4, MT5, FxPro
Markets,
cTrader
$100 Review Website
Cyprus CySEC MT4, MT5, Web $1 Review Website
Belize IFSC MT4, MT5 $100 Review Website
Cyprus, UK, South Africa, UAE CySec, FCA, FSCA, DFSA MT4, MT5, Web $5 Review Website
Cyprus, UK CySEC, FCA MT4, MT5 $1 Review Website
UK FCA MT5 $5 Review Website
UK FCA MT4, Web, MT4
for Mac
$100 Review Website
Australia, UK ASIC, FCA MT4, MT5,
cTrader
$200 Review Website

More Forex Market News

CFTC warns about 20 new forex and binary options scams

Dec 06 2019 17:46:44

The US Commodity Futures Trading Commission (CFTC) updated its warnings list with twenty new forex and binary options scam websites, bringing the total blacklisted websites to nearly 150. Read more

Thai authorities seize over 15 million baht from Forex-3D scammers

Dec 06 2019 10:38:02

  Officials from the Thai Department of Special Investigation (DSI) seized over 15 million baht from the owner of Forex- 3D Ponzi scheme and his associates, the Bangkok Post reported on Thursday. Read more

EU finance ministers agreed to block Libra

Dec 05 2019 13:46:59

EU finance ministers have agreed that  private digital currencies like Libra – the crypto coin Facebook plans to launch in 2020, should not be allowed in the European Union until all possible risks are identified and properly addressed, Reuters reports. Read more

CFTC looks for a binary options scammer who defrauded investors with $3,8 mln

Dec 03 2019 17:20:38

The United States Commodity Futures Trading Commission (CFTC) apparently can not locate Peter Szatmari, who defrauded nearly 4 million USD from binary options investors. Read more

Bulgarian court allows the extradition of Gal Barak to Austria

Dec 02 2019 17:51:14

After a successful operation of the police in Austria, Germany, the Czech Republic and Bulgaria has lead in February to the arrests of several financial executives, among which the Izraeli citizen Gal Barak, who is charged of orchestrating an online trading scam, that allegedly has defrauded Europea... Read more

Italy’s CONSOB blacklists EvolutionBrokers and KapitalSwiss

Dec 02 2019 15:30:33

   Italy's financial regulator Commissione Nazionale per le Societa e la Borsa (CONSOB) has blacklisted a bunch of unregulated brokers today, including EvolutionBrokers, and KapitalSwiss. CONSOB also ordered internet providers to block access to their websites. Read more

91 arrested in Indonesia over an online investment scam

Nov 29 2019 10:32:00

The Indonesian police has arrested 85 Chinese nationals and 6 Indonesians over an online scam that defrauded victims of over 36 billion Indonesian rupiah (2,56 million USD). Read more

Second person arrested in connection to OneCoin money laundering

Nov 28 2019 17:36:36

David R. Pike, a chief operating officer of Fenero Funds was arrested by the U.S. authorities in connection to laundering some 400 million USD, stolen through the notorious OneCoin Ponzi scheme.   Pike appears to have worked with the convicted OneCoin layer Mark S. Read more

UpBit hacked for $50 mln

Nov 27 2019 17:05:16

After a hacker attack South Korean crypto exchange UpBit has lost some 342 000 Ethereum (ETH) coins, equal to well over 49 million USD. The exchange has assured its clients that the loses will be covered by its own assets, but for the time being all withdraws have bees suspended. Read more

Charles Schwab buys TD Ameritrade for $26 bln

Nov 26 2019 18:01:43

Expected to be finalized in late 2020, the merger between two of the leading U.S. brokerage houses will create a mammoth company that will be in the position to challenge major financial rivals. Read more

de | cn | ru