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Central Bank issues warning about Pyramid Schemes

By   /  October 14, 2020  /  Comments Off on Central Bank issues warning about Pyramid Schemes

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Willemstad/Philipsburg – The Central Bank of Curaçao and Sint Maarten (CBCS) hereby warns the public about pyramid-like schemes. These schemes are currently promoted using the anxiety created by the economic stagnation and downturn caused by the ongoing COVID-19 pandemic. These schemes are used as a cover to victimize unsuspecting or vulnerable persons trying to make much needed “easy money”.

A Pyramid Scheme is a type of fraudulent investment scheme that profits almost solely by recruiting other participants into the program. The CBCS again warns the public to be cautious of the following pitfalls of a Pyramid Scheme: 1. Emphasis on recruiting; 2. Promise of high return in short term; 3. Complex commission structure; 4. No genuine product or service is offered; and 5. Easy Money.

We draw your attention to the fact that Pyramid Schemes like the “Blessings Circle” are currently active in our jurisdiction and being promoted as a legitimate opportunity to make quick money at a time when persons are (at risk of) losing their jobs and desperate to maintain their current living standards. The “Blessings Circle”, like other Pyramid Schemes, also relies on the recruitment of new participants to keep money flowing into the scheme. There are no products sold or real investments made to create profits. Once these schemes run out of new recruits, the structure collapses resulting in the loss of money for the late entrants.

We refer to the following link containing an Investor Educational Document about schemes that function as pyramid schemes:
https://news.sx/wp-content/uploads/2020/10/20190521_investor_education_piramideconstructies.pdf.

Please be informed that the CBCS will continue to take preventive and repressive steps in its efforts to stop alleged Pyramid and other fraudulent schemes from violating the rules and regulations of the CBCS within the jurisdictions of Curaçao and Sint Maarten. Therefore, if you suspect or are aware of a Pyramid or any other fraudulent scheme in Curaçao or Sint Maarten, we urge you to contact the CBCS on telephone number +5999 434 5500 or by email info@centralbank.cw.

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