The Royal Monetary Authority of Bhutan (RMA) has cautioned the Bhutanese public from participating in ponzi or pyramid schemes.
Such practices are not only deceiving, but are also illegal, according to the RMA.
This notification, according to the RMA, was made after it had come to RMA`s notice that Bhutanese citizens are being lured to participate in Pyramid/Ponzi Schemes (Crypto-Builder/ Nobel8 Revolution) via social media with promises of large financial returns.
“The essential feature of such schemes is that the investment made by member is used for generating returns for older investors with a large part of the investment remitted to the parent company. Therefore, such schemes will be sustainable only so long as the number of participants keeps growing exponentially,” states the RMA governor, Dasho Penjore in the public notification.
He added, “Hence the term pyramid used as the base must keep on expanding to ensure a return to earlier participants. However, since there is only finite number of potential participants, the schemes are bound to collapse when it is no longer able to attract new participants to the schemes.”
The governor also reminded the people to recall an investment scam prevalent in eastern Bhutan few years ago, where high proportion of population lost their entire savings.
According to the RMA, the notification is issued given the inherent and undesirable nature of such schemes and in order to protect unsuspecting citizens from suffering large-scale losses.
Meanwhile, the RMA has also cautioned organizers of such schemes to refrain from operating such schemes within the Kingdom of Bhutan.
It states that anyone found participating/facilitating such schemes in whatever manner shall be liable for prosecution under the Laws of the Kingdom of Bhutan.
Yenten Thinley from Thimphu