• Selfmaker Smart Solutions and Selfmaker Technology are the business entities on which the President of UOKiK has imposed fines - nearly PLN 1 million.
• The PLN 150 thousand financial sanction also applies to the CEO of Selfmaker Technology.
• A pyramid-type incentive scheme in which benefits depend primarily on bringing other consumers into the scheme - this is what the President of UOKiK has been challenging.

Pyramids - do you think they are only in Egypt? You may also face them when someone persuades you to contribute money and promises profits for getting other people to do the same. This is how you can take part in a project impersonating multi-level marketing (MLM), a pyramid-type incentive scheme that is prohibited by law. In such a project, the possibility of receiving financial benefits depends primarily on bringing other consumers into the scheme rather than on the sale or consumption of products. The originators of the scheme benefit from the contributions of others, while a small part of the money may go to the participants - it often happens that they receive nothing.

The President of UOKiK questioned the actions of two related business entities: Selfmaker Smart Solutions in Dubai, responsible for issuing tokens of the same name, and Selfmaker Technology in Łódź, Poland, creating self-service devices such as cash registers, deposit machines, information kiosks and automatic disinfection equipment, among others. Tokens, or crypto-assets - are digital units of value, assigned to a specific investment project. They can be purchased by anyone.

- The crypto-asset market, being unregulated and related to modern technologies, can be exploited by untrustworthy entrepreneurs who, under the guise of offering attractive products, obtain material benefits from investors’ contributions. The loser is the consumer who will not get their money back. In the latest decisions, we questioned the actions of the Sefmaker group. The entities deliberately disseminated false information to make their operations more credible and attractive. The goal was to raise as much capital as possible. Under their influence, consumers may have made unfavourable decisions to purchase tokens, hoping for a profit payout. Real benefits to consumers were made possible by participation in the affiliate programme which was in fact a pyramid incentive scheme prohibited by law, says the President of UOKiK, Tomasz Chróstny.

(Un)real profits

While encouraging contributions, Selfmaker Smart Solutions reported that the funds from the token sale were to be used to invest in the development of Selfmaker Technology and increase Selfmaker’s brand recognition. The plan was to take a 25 percent stake in Selfmaker Technology and purchase a production hall. According to assurances, the entity was supposed to share the profit generated from its investment in Selfmaker Technology with token buyers, the first time this should happen is in 2024. In reality - the production hall has not been purchased: it is leased, while Selfmaker Smart Solutions has acquired less than 10% of the shares which would significantly reduce the possible profit. However, there is no legal mechanism to guarantee the payment of dividends by the Dubai and Łódź entities. Investors conclude an agreement only with the Dubai entity, which may be of key importance should any problems with pursuing claims arise. In the UOKiK’s view, it was a deliberate act for Selfmaker Technology to entrust the issuance of tokens to a Dubai-based entity against which consumer redress may prove significantly difficult, if not impossible.

In addition, financial statements show that Selfmaker Technology made losses rather than “multimillion-dollar profits” as assured in marketing materials. The losses were to be covered by any profit, which means that investors may not receive the promised funds for a long time. The President of UOKiK found that the two entities misled consumers by disseminating information that the purchase of the token would guarantee payment of the profit Selfmaker Technology earned in a given year. Currently, the entity responsible for the tokenisation process, including the payment of dividends, is Selfmaker Smart Solutions FZ-LLC, which is not a shareholder of Selfmaker Technology. This can lead to consumer confusion about the entity responsible for the payment of any dividend and can even make the process much more difficult.

Pyramid-type incentive schemes

Distribution of the token was based on a pyramid-type incentive scheme. In exchange for getting other people into the scheme and persuading them to buy tokens, the entities promised remuneration. Not only did entrepreneurs set up and managed the project, but also carried out active marketing activities on social media, the website or at organised events. Selfmaker has heavily promoted the purchase of tokens among deaf people, including abroad. The company posted instructions, in its social media, in sign language on how to buy tokens. Deaf people are a vulnerable group of consumers who, due to their disabilities and communication barriers, may be particularly susceptible to being persuaded to invest money as well as encountering difficulties in verifying the information provided.

Decisions of the President of UOKiK

The President of UOKiK found that the entrepreneurs Selfmaker Smart Solutions and Selfmaker Technology violated the collective interests of consumers. Selfmaker Technology has been fined nearly 900 thousand zlotys (PLN 895,451). The financial sanction of PLN 150 thousand also applies to the company CEO, Marek Wieteska, since he intentionally and knowingly disseminated false information regarding the tokenisation process and the purpose of the funds raised as well as assured the guaranteed payment of profits to Selfmaker Smart Solutions and thus indirectly token purchasers. He also personally promoted the scheme, including to the deaf. He was one of the originators of the introduction of the affiliate programme, which, in addition to raising capital, was intended to ensure the building of a community associated with the Selfmaker brand.

The President of UOKiK imposed a fine of nearly PLN 100,000 (PLN 96,000) on Selfmaker Smart Solutions. An obligation was imposed on the company to remove the ongoing effects of the violation of the collective interests of consumers: people who bought tokens can apply to Selfmaker Smart Solutions for a refund. Consumers will be informed of the decision.

The decisions are not legally binding because the entities have appealed to the court. The appeal was also filed by the President of the Management Board, Marek Wieteska.

The investigation into the Selfmaker companies is also being conducted by the District Prosecutor’s Office in Łódź.