Huge earnings for clicking a button in the application, cryptocurrencies, hidden creators and a referral system in which recruiting more people can bring in a lot of money – CoinPlex has many features of a financial pyramid, but whether it is one, we will find out only if it collapses.
“I have and I earn”, “I have been in the program for 3 months and regularly withdraw profits”, “all my friends use the application and earn” – there is no shortage of comments from satisfied CoinPlex users on the web. While working on this text, we did not meet any aggrieved person who would complain that they lost funds using this application. There are no aggrieved people, everyone earns and is happy. So why do we warn against the CoinPlex application?
– Basically, it is not known where the company is headquartered. It is not known who the founder is. Apart from generalities, it is not known what the investment mechanics described by CoinPlex look like. There are a lot of question marks – says Marcin Daszkiewicz, an expert in the field of online fraud and the Fraud Manager at Remote Channels of Provident Polska SA.
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Our interlocutor points out that CoinPlex has not yet received any warnings from financial regulators, such as the Polish Financial Supervision Authority or the American SEC. However, this does not dispel the doubts that have been raised about this application.
– In my opinion, the mechanism of operation shows that this could be a Ponzi scheme. Their expansion is quite structured. For now, they have actually entered several markets and are pushing hard on them. In Poland, they have adapted to such an extent that they are starting to prepare a good legend here, which builds their credibility. There have been mentions that CoinPlex has become a sponsor of the Stal Mielec handball team. They are also supposed to be the main sponsor of a large cycling event – says Daszkiewicz.
The world's leading trading company
“The world's leading AI-powered quantitative trading firm” is how CoinPlex describes itself on its website. One of its promotional materials goes into more detail:
“Coinplex is an innovative digital asset management platform built specifically for global investors, offering a safe, stable, and high-yielding trading environment. By combining intelligent quantitative strategies with multi-level promotion rewards, Coinplex enables every user to easily multiply their investment.”
What is hidden behind these slogans? Multi-level marketing (MLM) centered around a mysterious application that earns money for the user, without requiring any skills or knowledge of financial markets. All you need to do is pay an appropriate initial deposit and click a button in the application several times a day, which is supposed to automatically generate transactions on the market. Artificial intelligence is supposed to be responsible for “quantization” – as the application itself calls this process.
The company claims to be registered in the United States, but its address in Denver is a virtual office. It is not listed in any American registers of entities licensed to provide financial services. There is no information about its founder on the web. The company lists his name and surname, but there is no trace of such a person or his photo anywhere on the Internet. The CoinPlex website lacks basic data, such as a phone number. When entrusting money to a company, we should know who is behind it.
In its marketing materials, CoinPlex claims to be credible by being listed on the MSB (Money Services Business) list maintained by FinCEN. However, this is not a license. Any company can be listed. FinCEN does not verify them. There are warnings online that scammers may be using the MSB registration process to create the appearance of legality for their businesses. One warning sign may be the lack of a state license to provide financial services, which CoinPlex does not have.
The form of company registration in the state of Colorado is the American equivalent of a limited liability company – also requiring no verification from the authorities. Another interesting fact is the date of obtaining these “licenses”. CoinPlex claims to have been operating since 2019. Its traces in the registers do not appear until November 2024.
On its Facebook channel, CoinPlex boasts of having obtained registration in Ontario, Canada. However, it turns out that it is listed in the local business register as a sole proprietorship, which requires only a working email address and a credit card to cover the equivalent of a PLN 200 administrative fee. The entire process can be carried out remotely.
The programming clues lead to China. As noted by the BehindMLM portal, which tracks financial frauds based on multi-level marketing, after checking the source code on the CoinPlex website, it turns out that it operates on the Meiqia platform.
“Meiqia is a Chinese software company from Beijing. This suggests that whoever launched CoinPlex has ties to China,” the portal describes.
Another interesting fact is provided by Google Trends data. According to them, searches for the app will start appearing in the fall of 2024. The only significant source of traffic is Poland, with a particular indication of the Podkarpacie region. This is strange, considering that the company claims to have been operating since 2019 and operates from the United States. It seems that no one is looking for information about it in its native country.
On its website, CoinPlex boasts partnerships with 15 leading cryptocurrency exchanges. Binance customer service, however, denies any affiliation with the platform. The app also has no relationship with cryptocurrency exchange Kraken. “Be careful,” its support team tells us.
Everyone can earn money
The only CoinPlex user who agreed to answer my questions said that the minimum deposit is the equivalent of $ 50, and the maximum allowed deposit is $ 1,000. The user has the option to withdraw funds at any time, but only every 25 days are they exempt from the high commission.
– It is generally accepted that after the deposit is recovered, which usually takes about 35 days, the user should withdraw their capital and leave only the profits in the application. This is the safest method of investing – explains the application user. – In the event of serious turmoil on the stock exchanges, for example, the emergence of a quantum computer that could break the blockchain and cause cryptocurrencies to lose all their value, users will not lose any of their deposit, because it is paid out at the beginning. It should be remembered that every investment – in cryptocurrencies, forex, stocks or bonds – is associated with risks that vary depending on the potential profits – explains our interlocutor.
According to the CoinPlex user, the return achieved thanks to the application is in practice from 1.8% to 1.9% daily. The funds are reinvested. Using the formula for compound interest, we can easily calculate that in such a case the minimum investment of $ 50 should turn into an amount of around $ 33,644 after a year (by investing PLN 188 you can earn over 126,000!) In response to the question whether my interlocutor does not think that 1.8% daily return is a lot, I hear:
– I think very little. If you consider this return to be very large, it means that you have poor knowledge of economics, stock markets, forex and financial leverage. You should know that on financial markets, even a volatility movement of 0.5% with a leverage of 1:100 translates into fluctuations of 50% or more. The daily profit of 1.8-1.9% offered by CoinPlex is therefore very small compared to what almost every user can achieve if they take a good position on the forex market. However, this small value guarantees the stability of profit – thanks to this, we earn in small steps, but systematically – says the application user.
So I decided to ask someone who knows something about financial markets about the question of how to assess the return on investment.
There are no certain or even “guaranteed” rates of return on financial markets.
There are no investors or automated systems that can make money on every transaction. It is said that the best traders achieve a percentage of profitable transactions of around 55%. It is therefore impossible for anyone to “deliver” a regular rate of return day after day. It is simply unfeasible. And even if someone invented such a system, the market will adapt to the functioning of the new algorithm and modify its behavior so that this model will stop bringing profits. Besides, it is enough to substitute the promise of 1.8% profit per day into the formula for the annual rate of return. Assuming that a year has 250 trading days, we get an annual return of 85,486%. It is not possible to generate such a high and repeatable rate of return. Also (or maybe even especially) using financial leverage.
Christopher Knees
They involve whole families in this.
– I cannot accurately estimate the number of CoinPlex users. I have come across information that it is difficult to recruit new people in the Podkarpacie region, because the application users involve entire families. So I assume that the scale may be really large – says Marcin Daszkiewicz – In my entry about this application on LinkedIn, I mentioned uniformed services, because that is where the topic came to me. I cannot say exactly from which service, but the person who asked me for advice claims that practically all of their colleagues are already involved in CoinPlex or are trying to convince others to do so – adds the expert.
“The whole work is to run the AI bot four times a day. Thanks to this, you can start earning interesting money and the moment you share with your friends, you will build your environment, the company will reward you. It will allow you to reach a higher level, so that more money will work for you, achieve a higher percentage and you will be able to quantify one more time a day. That is why it is worth helping others” – we hear in the video published by one of the CoinPlex promoters.
Daszkiewicz points out that similar mechanisms have already appeared in Poland in the past. – First, you build a group of “useful idiots” – people who draw in other participants . When the market turns out to be attractive, you start building a brand and credibility of the activity, to show yourself from the best side. Hence sponsorships, which can be understood as a type of marketing – for example, cooperation with a sports team, office or institution. This raises the rank and allows some to believe that everything is verified, legal and reliable – explains our interlocutor.
CoinPlex is indeed involved in sports sponsorships. According to information on the web, the application (or rather its promoters in Poland) have become sponsors of the Stal Mielec handball team. We directed questions on this matter to the club's spokesman, but he did not respond by the time the article was published. CoinPlex will also be the main sponsor of one of the largest cycling events in the country, in the previous edition of which almost 8,000 people took part.
We asked the Polish Financial Supervision Authority about the CoinPlex application and the actions it can take to counteract cryptocurrency pyramid schemes.
– The KNF Office is obliged to investigate every case that may be related to the violation of the interests of financial market participants, even if such activity concerns an entity not supervised by the KNF. In such situations, the Supervision Office undertakes the necessary explanatory activities, and in the event of a justified suspicion of a crime being committed, it sends appropriate notifications to law enforcement agencies, e.g. in the scope of art. 286 of the Penal Code, i.e. the crime of fraud – commented the Commission spokesman Jacek Barszczewski and confirmed that “CoinPlex is in the area of interest of the KNF “.
Chance for a happy ending?
– In my opinion, this story will not end soon, because the potential to attract new people is huge. I suspect that even if CoinPlex is a pyramid scheme, there will be no “rug pull” in the near future, i.e. a situation in which the organizers close the business and disappear with the money. If the suspicions about the application are confirmed, I think that a possible scenario is a situation in which at some point an institution will intervene and then everything will fall apart – says Marcin Daszkiewicz.
Looking at the history of similar MLM applications, it often happened that when their topic was publicized, they changed their name and began offering identical services under a different name. In recent years, hundreds of platforms have appeared on the web and then disappeared with the money of “investors” that offered users a vision of financial freedom in exchange for a transfer and a few clicks.
Until CoinPlex disappears with the investors' money, we can't say for sure that it's a pyramid scheme or a Ponzi scheme. However, the duck test can help us, according to which, if you're not sure if what you're looking at is a duck, but it looks like a duck, swims like a duck, and quacks like a duck – then it probably is a duck.
