Don’t be fooled by pyramid schemes operating as so-called “split games” in B.C., the independent provincial government agency responsible for regulating capital markets is warning.
According to a release from the British Columbia Securities Commission (BCSC) on Tuesday, virtual shares in “split games” are being marketed and sold in the Lower Mainland’s Chinese community by B.C.-based promoters of FullCarry and International Money Tree.
The shares are apparently not backed by any underlying asset, the release said, and can only be bought and sold online.
The promoters claim rising demand will drive up the price of the shares and when the price hits a certain threshold, the shares “split,” perhaps doubling or tripling in number and returning to their original price.
Promoters also limit how many shares users can convert to conventional currency, and charge a 10 per cent transaction fee for selling them. Meanwhile, they focus on recruiting more participants by giving buyers bonuses for each additional person they bring into the game.
“Whenever someone promises high returns with little or no risk, that’s a warning sign,” said Doug Muir, director of enforcement for the BCSC. “These split games, like other pyramid schemes, depend on more and more people buying in.
“You could easily lose your entire investment.”
FullCarry, formerly known as Furuida Global or FRD Global, purports to be incorporated in the British Virgin Islands and based in Dubai. The BCSC said B.C.-based promoters for FullCarry are known to have held meetings in Vancouver and Richmond, and operate a private WeChat group.
International Money Tree purports to be headquartered and operated in Singapore.
The BCSC said games being promoted in B.C. are similar to online investment schemes that have surfaced in China and Malaysia, one of which resulted in organizers being sanctioned by authorities for issuing unauthorized payment instruments.
Anyone who has information about a split game is urged to contact the BCSC Inquiries line at 604-899-6854 or 1-800-373-6393, or to file a complaint online.