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Office of Competition and Consumer Protection

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"Netleaders" and the DasCoin cryptocurrency - proceedings of UOKiK

< previous | next > 04.12.2018

"Netleaders" and the DasCoin cryptocurrency - proceedings of UOKiK
  • The promotional system of the undertaking introducing the DasCoin cryptocurrency onto the market may be a pyramid scheme.
  • The President of UOKiK has submitted a suspected offence notification to the prosecutor’s office.
  • He is also conducting proceedings in the present case.

A pyramid scheme is a structure where the profit of one participant directly depends on payments of subsequent participants in the scheme. Pyramids do not invest. They only pretend that they do in order to conceal their nature and the fact that profits of its participants are derived first and foremost from payments of subsequent members. For this reason, it requires a constant inflow of new members for its operation, which results in it collapsing sooner or later. The greatest benefits of the pyramid are reaped by its creators, and in the event of collapse its participants most frequently lose all of the contributed money.

The President of UOKiK suspects that CL Singapore Pte. Ltd, a company with its registered office in Singapore which introduces the DasCoin cryptocurrency onto the market and promotes a network of independent representatives called “NetLeaders”, who are remunerated on the basis of the so-called NetLeaders Remuneration Plan, is a pyramid scheme.

As part of the offer, purchasers are awarded a specified number of mining cycles for the DasCoin cryptocurrency, depending on the type of licence purchased, which according to assurances of CL Singapore they will be able to use to pay for services and products offered by the company; however, at present the purchase yields no tangible benefits, as the majority of services for users are in the testing or planning phase and the value of this so-called cryptocurrency is marginal.

“We suspect that the promotional of CL Singapore is a pyramid scheme. For this reason, in June 2017 we submitted a notification of offence with the Regional Prosecutor’s Office in Warsaw, and following the investigation procedure, we instigated proceedings against CL Singapore last October. The proceedings may end with the undertaking being fined up to 10 per cent of its turnover,” says Marek Niechciał, President of UOKiK.

What is DasCoin?

DasCoin is presented as a cryptocurrency which can be purchased by anyone. CL Singapore, the company responsible for introducing it onto the market, invites users to become its representatives. In order to do that, they need to register and pay EUR 49. They receive commission on sales of subsequent licences to referred persons and bonuses for creation of a team.

“The profits depend on introduction of new consumers into the system, not on sales or consumption of products. Profits can be obtained even when the referred person does not purchase a licence but registers as another representative to persuade more customers and participants in the system. The more people are recruited, the higher the company’s profit – bonus payments are only a fraction of the revenues, the rest is retained by the undertaking,” the President of UOKiK adds.

Consumer support:

Phone: +48 801 440 220 or +48 22 290 89 16 – consumer helpline
Email: [SCODE]cG9yYWR5QGRsYWtvbnN1bWVudG93LnBs[ECODE]
Branches of the Consumer Federation
Consumer ombudsmen – in your town or county

Additional information for the media:

UOKiK Press Office 
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone: +48 695 902 088, +48 22 55 60 246
Email: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL

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