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Crowd1 pyramid scheme not legally in South Africa

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Crowd1 works through a mobile application that you download to your phone. You then buy euro-based packages or “owner’s rights” that cost between R1 600 and R40 000 at the current exchange rate. This apparently entitles you to a percentage of the joining rate of any new members you recruit.

One person recruits four people, another four recruits, another four recruits. The more members recruited under a member, the more money he is paid. This is how most pyramid schemes work.

The Financial Sector Conduct Authority’s (FSCA) said in a Tweet that Crowd 1 is not an authorized Financial service provider, nor a representative of an authorized FSP and there is no record of an application to become an authorized FSP with the FSCA.

The FSCA says they are not authorized to render any financial services as contemplated in the Financial Advisory and Intermediary Services (FAIS) Act. Members of the public are warned to not conduct any financial services business with any individual or entity associated with Crowd 1.

Crowd1 was banned in Namibia for being a “Ponzi scheme”.

Investment advisor Magnus Heystek were targeted on social media after he branded Crowd1 as a pyramid scheme in a report in Rapport on Sunday.

Heystek, director of Brenthurst Wealth, believes there is an orchestrated attempt to discredit him after many upset members of Crowd1 “bombed” his company’s Facebook page with posts.

Some of the upset members also commented on Rapport ‘s Facebook page, saying the newspaper had not done its homework properly.

Crowd1 has been referred to the Prudential Authority for investigation.

South Africans can still decide if they wish to join the scheme, however it is not recommended by top financial experts and not registered with FSCA.

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