New Ponzi Schemes Revealed in Kazakhstan

Based on the gaming platform

Kazakhstan’s Agency for Regulation and Development of the Financial Market has announced it uncovered a new financial pyramid in the country.

It is a routine practice for the regulator to monitor social networks as the agency tries to have a finger on the pulse of the financial life in the country. During such an examination, the agency has detected a fraud activity of Finiko, which is still actively advertising itself, particularly on Instagram by promising people a high level of return. According to the agency, this activity has all the signs of a Ponzi scheme, not a real investment business.

Finiko offers its clients the ability to invest in cryptocurrency and some other products on Сyfron Сapital OÜ platform. But in fact, this is just a gaming platform, which imitates situations with purchasing real estate, cars, settlement of obligations and investments.

Cryptocurrency СYFRON (CFR), whiсh is supposed to be a transaction currency on the company has no real value. In other words, people put their money into a sort of simulation, not a real investment business.

Also, Finiko promises a return of 1% or 1.2% each day, which is 43 times higher than commercial bank deposits in tenge on average. To make a long story short, this rate of return is just impossible.

Moreover, Finiko says that if a client is ready to bring a 35% share of his debt the company will pay the rest. Similar conditions are applied to car loans and real estate: a client brings 35% of a property’s value, the company will purchase it and give it away to a client.

The company also offers cards with a cashback up to 25% of the product’s value or 6% as a reward for using a client’s money available on his card. If a client can invite five more clients he can be rewarded with 10% more cashback. At the same time, Finiko declares that this card has been issued in conjunction with MasterCard, even though there is no Finiko in the list of MasterCard partners on the company’s website.

Another sign of fraud activity is the unwillingness of Finiko to work with bank accounts. The company prefers cash or such services as Qiwi Wallet, Yandex Money, Easy Pay, PayPal and so on. As a result, the company’s clients can’t track where and when their money was invested.

Finiko operates not only in Kazakhstan but in Russia as well. The Russian authorities have already opened the case against the company, which is accused of illegally collecting money from Russian citizens in Tatarstan and some other territories over the period from August 2019 to December 2020. The amount of harm is about $ 1,082,380 in total. 

Kazakhstan’s Agency for Regulation and Development of the Financial Market believes that Finiko activities are similar to the Ponzi scheme and a financial fraud. Moreover, this company can’t be considered a financial organization because it has no license. It means that the company cannot collect money from people for investment or other purposes.

In Kazakhstan to collect money from people either for deposits or purpose of investments into financial instruments, a license is needed. Usually, this kind of license is issued to commercial banks, national postal service operators and professional participants of the stock market (brokers dealers and managing companies). The agency has published all the proper information on its official website.

The regulator has warned Kazakhstanis from doing business with Finiko or using its products. Earlier in Aktobe, another company, was closed whose operations were based on a Ponzi scheme. Criminals worked in five cities of Kazakhstan and offered clients to buy fake stocks.

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