Today on April 10th, 2023, BehindMLM turned thirteen.
For too many years I’ve been wanting to put out an annual post discussing where the MLM industry is at.
I last did this in 2015 but since then one thing or another has come up around this time of year. Typically, if there’s no news to cover I look at my review list and have decided to focus on that instead.
This year there’s a about three companies on my shorter review list. I tend to get through these before tackling larger reviews.
I can’t remember every year but, due to the explosion of MLM crypto fraud, typically my shorter review list has had anywhere between fifteen to thirty companies to review.
No matter how quickly I got through reviews though, there was always more companies being added.
The reason things are different this year is simple: following the Terra/Luna collapse in May 2022, crypto is general has nosedived.
The decline of MLM crypto fraud
It took a while for this to translate across to MLM related crypto fraud but, slowly but surely, overall MLM crypto launches are way down. Existing MLM crypto companies are struggling to stay afloat – if they haven’t already collapsed.
As far as I can tell, the pool of new victims entering MLM crypto schemes has declined dramatically. This started around August 2022 and began to peak running into Christmas.
In early 2023 I noted a number of schemes launched with domains registered pre May 2022. There seems to have been a pause on a number of launches following Terra/Luna.
Universally these schemes failed to gain any traction. Simply put: the MLM crypto climate isn’t any better today than it was throughout Q3 and Q4 2022.
Hopefully the MLM crypto fraud space continues to decline. This will have a lot to do with crypto in general though.
US authorities are spearheading efforts to tackle cryptocurrency in general (we’re past the point of pretending it has any legitimate use-case).
Do Kwon, the guy who ran Terra/Luna, was recently arrested trying to board a flight from Montenegro to Dubai.
Sam Bankman-Fried, who ran the collapsed FTX exchange Ponzi scheme, was criminally charged and arrested back in January.
The SEC filed securities fraud civil charges against Justin Sun and TRON on March 22nd.
The CFTC filed commodities fraud civil charges against Changpeng Zhao (CZ) and Binance on March 27th.
Criminal charges against both Sun and CZ are likely pending.
If you look at bitcoin you might be wondering why, in spite of these events, it’s currently sitting at ~$28,000.
This is mostly due to the tether pump and dumpers (push button on laptop, generate billion tether on demand, sell tether for USD, use USD to buy and pump bitcoin, repeat).
Look for legal action against tether and its operators after criminal charges against Sun and CZ have dropped – possibly earlier depending on what’s going on behind the scenes.
In between the cases above, there have been multiple crypto exchange Ponzi schemes retreating from the US, and/or shutting down and/or collapsing.
There’s also the issue of banking offramps disappearing (e.g. Signature Bank, Silvergate), making it harder for crypto investors to cash out.
One could make the argument that AI might resurrect the crypto grifts now the NFTs are completely dead, but I think that’s unlikely.
AI is, for the most part, progressing as a stand-alone emerging industry (the AI industry has been around for years but has only recently really taken off).
I’m sure blockchain AI grifters out there trying to piggyback but, at least as far as I’m aware, nobody is paying them much attention.
MLM fraud geography
Dubai remains the epicenter of MLM related fraud. Authorities there are unreliable if not outright deceptive, and this extends well beyond MLM related fraud to fraud in general.
Just a few days ago a Dubai court denied extradition of the Gupta Brothers from Dubai to South Africa.
A United Arab Emirates court has dismissed South Africa’s request to extradite Atul and Rajesh Gupta, brothers who face charges of political corruption, Justice Minister Ronald Lamola said on Friday.
The court had ruled that the UAE had jurisdiction to prosecute the Guptas for money-laundering offences alleged to have been committed in the UAE and South Africa, Lamola said.
He added that South Africa would “promptly appeal” the decision, which he said “flies in the face of assurances given by the UAE authorities”.
The UAE ratified an extradition treaty with South Africa in April 2021, a move South African President Cyril Ramaphosa’s government had hoped would lead to the return of the Guptas to face charges.
The UAE obviously has no standing to prosecute the Guptas. What they likely want though is a cut of the $32 billion the Guptas stole before they fled.
On the victim side of things hotspots I noticed over the last year include Colombia and France. To a lesser extent neighbouring countries too (especially in South America).
The US and Canada of course had their usual fair share of exposure to scams – but for the most part recruitment emphasis was on third-world countries.
For most of 2023 thus far I haven’t really noticed any obvious geographical trends.
Rise of the YouTube scamfluencer and Telegram scam groups
Traditional MLM fraud entry ramps, like FaceBook, isn’t really being used by anyone over 50. That’s reflective of FaceBook in general. While there is a lot of crypto chatter on Twitter, it’s not really being used to market MLM schemes.
This shift has given rise to the “investment fraud” YouTuber. These people openly promote scams on YouTube and can usually be identified by the catchphrase “this is not financial advice” (which legally doesn’t count for anything).
Promotion of fraudulent MLM schemes on YouTube typically funnels victims toward shady Telegram groups. Perhaps WhatsApp too if you’re in India and/or south-east Asia.
Authorities and regulators typically don’t go after communication platforms. Whether YouTube itself does something is hard to predict.
Don’t expect anything from Telegram; it’s owned by Russians, operated through a BVI shell company and headquartered in Dubai.
If YouTube does decide to tackle fraud promo videos it probably won’t be any time soon. YouTube can’t seem to do anything about hijacked channels streaming recycled Elon Musk webinar footage, with disabled comments and crypto scam links in the stream chatbox.
I saw a few Andrew Tate ones pop up on my YouTube home screen as soon as recent news of his release broke too.
The broader MLM industry
A general trend I’ve seen emerge over the last year or so is established MLM companies being sold off.
This is a combination of
- older company owners wanting out;
- economies around the world struggling (less money for people to spend on MLM); and
- MLM companies failing to recover from COVID-19 economic conditions (and then getting walloped by the current economic climate).
There haven’t been many launches over the past year (April to April). And the companies that have launched haven’t really taken off after their initial launch hype. Elomir and Awakend come to mind as two prominent examples.
One stand out is LiveGood – although from what I’ve seen it’s unfortunately just being promoted as a product-based pyramid scheme.
With the decline in MLM crypto schemes popping up, I’m really hoping to be able to redirect focus on the broader MLM industry. I’m not as tuned in on what’s happening as much as I’d like to be.
I also have some wider MLM content ideas I’d like to explore at some point but haven’t had time for.
The SEC and DOJ remain at the forefront of regulation of MLM related fraud. We haven’t really seen anything substantial from the FTC in a while.
Decisions in the FTC’s Success by Health and Neora cases remain pending. These decisions are long overdue and have been dragging on for months. The Neora and Success by Health trials wrapped up last October and this February respectively.
FTC actions against MLM companies have been dogged by uncertainty created by the Supreme Court’s AMG decision in 2021.
The FTC worked around the AMG decision in both the SBH and Neora cases but, pending published orders, things remain in limbo.
I don’t think we’ll see anything substantial till both cases are resolved. And if the FTC loses either case, there’s likely to be further delays in regulation as the impact of the orders is interpreted with respect to MLM regulation going forward.
The FTC was pushing for Congress to resolve the issue but I haven’t seen anything recent on that.
BehindMLM is in a pretty good place at the moment. I’ve obviously had to adjust down a bit as living costs have increased but for the most part I’ve got what I need to work.
Obviously after 14 years my routine is pretty well established, and I don’t see that changing any time soon.
With respect to BehindMLM’s site design I like where it’s at. Functional and information first. I know the overall design is dated but this doesn’t bother me.
I will have to do something when WordPress’ “Classic Editor” plugin is retired – but I’ll cross that bridge when I come to it (the plugin was originally meant to be retired in 2021).
A FAQ and some additional enhancements remain pending (comment guidelines and somewhere I can leave a quick note to readers if I need to). These are things I’ve been wanting to get to for years, but I always prioritize content first.
As I look back on my 2015 “State of the Industry Address” (I think “State of the Scam” is a bit more catchy), not a lot has changed with respect to my editorial philosophy.
I’ve published an additional 6000+ articles since the 2015 update. It’s reassuring to know, in retrospect, that I was on the right track all those years ago.
Once I’ve freed up a bit more time towards the end of this year and I’ve got time to explore topics in more detail, I’m looking forward to expanding our coverage into the more theoretical arena too. This includes opinion pieces and more exploratory articles.
Right now I’m sort of in a news/review lockdown, which can get a bit stale.
Some things however haven’t changed.
It’ll probably take a few months yet to fully hit but I’m hoping the decline of MLM crypto fraud gives me a bit more downtime. It hasn’t been unusual for me to work seven days a week since crypto fraud really took off circa 2017 or so.
I enjoy what I do so this isn’t a complaint. There’s something uniquely satisfying about researching a scheme, covering it as it inevitably collapses, following up when authorities catch up, and tracking proceedings till someone’s fined and/or winds up in prison.
It’s an itch I don’t think I’d be able to scratch in too many other professions.
My mind definitely needs a rest though. Running BehindMLM can be very mentally taxing. It’s not one thing in particular but rather all the aspects of operation combined.
I’m acutely aware BehindMLM is the largest repository of MLM related research and information that exists anywhere, and that’s sometimes daunting to comprehend.
Overall I wouldn’t say I’m burnt out but I’m perhaps occasionally “simmered out”. Things tend to pile up around you if you remain hyper focused on one aspect of your life over an extended period of time.
Certainly my dedication to BehindMLM has cost me dearly in some aspect of my life. This is glaringly obvious as I look back on the years since my 2015 update.
Waking up every day and going toe to toe with criminals, often for years before authorities catch up, takes its toll. But it’s a price I’ve been willing to pay (at least where I’ve had a choice).
If I can make even a small positive difference in people’s lives through awareness and education, I think that’s a worthwhile endeavour to pursue.
And after all these years and when all is said and done, I draw comfort in knowing I’ll have left my mark on the world in my own way.
These principles always have and will continue to guide BehindMLM’s editorial process. That and the popcorn laughs, which I can seemingly never get enough of.
As always, thanks for reading. I do intend to keep up with “State of the Scam” annually, so look out for another update on April 10th next year.