BoN: ‘Crowd1 must stop business immediately’
The central bank has warned Crowd1 that failure to stop its business activities immediately will results further appropriate action.
Jo-Maré Duddy – The business model of Crowd1 Network Limited is not sustainable and will result in members of the public, especially those at the bottom of the scheme, losing their money, the Bank of Namibia (BoN) said on Friday.
In a statement issued by the director of strategic communication and financial sector development at the BoN, Dr Emma Haiyambo, the central bank ordered Crowd1 to stop their business operations immediately.
According to Facebook, Crowd1 Namibia has 353 members. The group’s Facebook page shows the last activity on the page was at the end of January. Although the page is listed as “public”, one has to become a member to view any details regarding local management and the business model on it.
A comprehensive review of Crowd1 on the website, onwealthchronicles.com describes it as an “online MLM opportunity that offers shares that you can purchase and earn from building a network of investing members [sic] shares as well”.
The website doesn’t recommend becoming a member of Crowd1.
‘Contravenes’
Haiyambo said the BoN investigated the business model of Crowd1 Network Limited (Crowd1) in accordance with the Banking Institutions Act, 1998 (Act No. 2 of 1998) as amended.
“The investigation was conducted to determine whether the business activities of Crowd1 are in contravention of section 55A of the Act,” she said.
The BoN found that the business activities of Crowd1 contravenes the applicable section of the Act as its core business activity is to introduce new members of the public to its business practice.
Participants who join as members are encouraged to recruit new members through promises of bonuses and additional owner rights.
“The primary source of income for Crowd1 is generated through the recruitment of new members. As soon as the recruitment of new members ceases, members at the bottom of the structure will not receive the promised bonuses or owner rights,” the BoN said.
“Crowd1 does not sell tangible products or render any service of essential value, but the primary source of income for Crowd1 is the sales of membership packages to new members,” the statement continued.
The BoN warned Crowd1 that failure to stop its business activities immediately will results in the central bank taking “further appropriate action as provided in the Act”.
In a statement issued by the director of strategic communication and financial sector development at the BoN, Dr Emma Haiyambo, the central bank ordered Crowd1 to stop their business operations immediately.
According to Facebook, Crowd1 Namibia has 353 members. The group’s Facebook page shows the last activity on the page was at the end of January. Although the page is listed as “public”, one has to become a member to view any details regarding local management and the business model on it.
A comprehensive review of Crowd1 on the website, onwealthchronicles.com describes it as an “online MLM opportunity that offers shares that you can purchase and earn from building a network of investing members [sic] shares as well”.
The website doesn’t recommend becoming a member of Crowd1.
‘Contravenes’
Haiyambo said the BoN investigated the business model of Crowd1 Network Limited (Crowd1) in accordance with the Banking Institutions Act, 1998 (Act No. 2 of 1998) as amended.
“The investigation was conducted to determine whether the business activities of Crowd1 are in contravention of section 55A of the Act,” she said.
The BoN found that the business activities of Crowd1 contravenes the applicable section of the Act as its core business activity is to introduce new members of the public to its business practice.
Participants who join as members are encouraged to recruit new members through promises of bonuses and additional owner rights.
“The primary source of income for Crowd1 is generated through the recruitment of new members. As soon as the recruitment of new members ceases, members at the bottom of the structure will not receive the promised bonuses or owner rights,” the BoN said.
“Crowd1 does not sell tangible products or render any service of essential value, but the primary source of income for Crowd1 is the sales of membership packages to new members,” the statement continued.
The BoN warned Crowd1 that failure to stop its business activities immediately will results in the central bank taking “further appropriate action as provided in the Act”.
Comments
Namibian Sun
No comments have been left on this article