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.
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.
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.
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:
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.
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.
| Broker | Country | Regulation | Platform | Min Deposit | Review |
|
US | CFTC, NFA | MT4, Web, in-house |
$50 | Review Website |
|
US | NFA, CFTC | MT4 | $250 | Review Website |
|
Cyprus, UK, Mauritius | CySec, FCA, FSC | MT4, MT5, Web | $10 | Review Website |
|
Australia | ASIC | 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 | MT4, Web, MT4 for Mac |
$100 | Review Website |
|
Australia, UK | ASIC, FCA | MT4, MT5, cTrader |
$200 | Review Website |
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