FCA Exposes Ponzi Scheme Gainmax Capital

March 20, 2018

The UK financial regulator, the Financial Conduct Authority is frequently issuing warnings about companies that are acting against the interest of the consumer. Earlier today, the watchdog has highlighted another one, called Gainmax Capital.

The website of Gainmax Capital looks like a classic Ponzi scheme, promising guaranteed returns to users that sign up for an account with the firm. According to the information presented on the website, the firm guarantees monthly profits on trading commodities, currencies and stocks.

Classical Ponzi Scheme Attributes

In a particularly worrying section of its website, Gainmax Capital claims that clients who invest bigger amounts will get bigger returns. A table with tiered returns on investment reveals an overblown percentage return from 5% for depositors of up to $250, to 10% for those who commit above $10,000.

The tiers are also tied to a minimum term with the biggest amounts requiring 5 weeks, while the smallest investors have to commit to 20 weeks. The company’s Youtube channel has testimonials from what are stated to be random users, some of whom are claimed to be based in the US.

The presentation of the company on the site is made by a person with an Eastern-European accent, who claims that the firm is based in London. Gainmax Capital is also offering a classical Multi-Level Marketing (MLM) scheme, where people who refer others to the Ponzi scheme are getting higher returns on their investments.

FCA’s Continued Fight Against Fraud

The FCA has been active in issuing alerts related to companies that misrepresent themselves as entities that are based in the UK. From binary options to fake brokers, boiler rooms, clones and Ponzi schemes, the watchdog has been posting warnings on its website for many years.

The main issue with the warnings that are posted by the FCA is that they are usually too late. In the case of Gainmax Capital, the video that depicts a person that is allegedly a financial expert from the firm is posted on Youtube in June 2017. Since then the company’s channel posted several more videos, the latest of which dates to February this year.

The FCA’s warning appears to be the first official warning against the company.

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