Ponzi app MTFE collapses, thousands set to lose everything
Referral benefits fueled the scam's nationwide spread, attracting thousands of rural youth to try their luck with the app
Download an app, create a virtual account, deposit cryptocurrency, log in daily for an hour to earn a quick 30% monthly return, and invite others for even more lucrative rewards.
This was the lure that enticed many into the MTFE app.
The cyber Ponzi scheme, masquerading as an unregulated international broker, has revealed its true nature after attracting tens of thousands in Bangladesh.
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MTFE users, already anxious about their inability to withdraw funds for two weeks, were suddenly confronted with substantial and questionable losses in their virtual trading accounts on Thursday night.
"I had over a thousand dollars in my MTFE virtual account and on Friday it showed my account balance was minus $1,400," said Asadur Rahman, an MTFE user in Dhaka.
MTFE sought new investments from everyone to cover losses. Users reported unidentified agents using intimidation tactics, threatening legal action for additional funds."
"I am now certain that MTFE had been fabricating investment profits or losses," said Moinul Islam, another defrauded MTFE user in Dhaka. "In reality, its virtual trading environment fabricated everything to embezzle our money."
He added that he regrets inviting some friends to the fraudulent platform for some referral bonus, inadvertently contributing to the scheme's spread.
Referral benefits fueled the scam's nationwide spread, attracting thousands of rural youth to try their luck with the app.
Gazipur's Arif Hossain who ascended to the position of a team leader of the MTFE users, like nearly 400 more in Bangladesh, now believes all the money has been embezzled by the unseen scammers.
Manik Bhoumik, a surgical equipment trader in Chattogram, also ascended to the same position, said, "I was promised to have a monthly salary from MTFE, but got nothing."
The platform used no legal transaction channel, its whereabouts or management team – nothing was known to the people, and still, people were chasing quick returns, said Major Mohammad Shamsuzzoha (Retd), a member of the US Association of Certified Fraud Examiners.
It is a textbook Ponzi scheme – depending on new entrants to benefit previous ones and collapse at some point-- was observed in the case of MTFE too and people should have avoided falling into this trap much earlier, he said.
Proliferation of MTFE
Talking to several team leaders they call the "CEO"s, The Business Standard has learned that MTFE (Metaverse Foreign Exchange Group) claimed to be registered in Ontario, Canada, and had no office or official in Bangladesh.
Instead, it used the user team leaders to spread its net for collecting more money from more and more people.
However, Ontario Securities Commission's website shows, "Metaverse Foreign Exchange Group Inc, found at www.mtfe.ca, is not registered in Ontario to engage in the business of trading in securities."
A few of the early users in Bangladesh have been named by a majority to be at the top of the pyramid and who were aggressive in hunting new users who made even million dollars or more.
Masud Al Islam, now operating from Dubai, has the largest network of MTFE users in Bangladesh under him and the passive income against his active followers' relentless marketing campaigns made him a fortune to afford a lavish life.
Mahfuzur Rahman of Dhaka was named by many as their team leader and his network grew much slower as they did not aggressively promote the platform like Masud did from Dubai.
Most of the team leaders had secured their own capital by withdrawals before the recent issues within the platform.
Many of the team leaders switched off their phones after Thursday night and renamed or closed their Whatsapp groups of followers.
Tariqul, a team leader in Rajshahi was unreachable over the phone, just like Mahfuzur Rahman.
Masud Al Islam, suspected to be a mastermind of the international scheme, appeared in several Zoom meetings or social media lives to deny the suspicion about him and also about the platform itself.
He, however, did not respond to a TBS request for a comment over the telephone on Saturday.
Concrete information on the number of people defrauded by the scheme in Bangladesh is unavailable. However, the user team leaders estimated that the number could range from one lakh to half a million.
Some team leaders, who themselves lost substantial sums, estimated the scam's scale to be around a thousand crore taka or much bigger.
A team leader on the condition of anonymity said, "The usage of the app spread rapidly in the past four-five months due to referrals. With what's happening now, it seems like we have been defrauded."
Another team leader in Dhaka said he was under terrific pressure from his friends and followers as soon as the app halted payments, showing fake sudden losses.
The MFTE also extended its network to Sri Lanka, Nigeria, Pakistan, and India. Users in those countries faced similar fates in recent weeks, according to the team leaders.
Investment in foreign assets is prohibited in Bangladesh, still, such schemes continue. Investing money abroad from Bangladesh has been illegal without the central bank's permission.
MTFE users buy cryptocurrency to pay MTFE and get paid back in cryptocurrency.
Local over-the-counter arrangements to facilitate such transactions have been an open secret to tens of thousands of people.
