Let’s clarify what the pyramid scheme is.
Generally, if a company works as multilevel marketing and has no product to sell, it is considered a pyramid scheme.
In other words, the only way how people within the structure make money is via recruiting.
Such pyramid schemes are illegal in most countries, simple because this “model” is not sustainable, and the whole structure looks like this:
The only people who make money are at the top, while the rest is losing the money.
It is a matter of time until the structure crashes.
So what kind of product PetronPay has?
There is no product that can be sold out to the end customer
Solely based on this, I will consider PetronPay as a pyramid scheme
PetronPay provides no information on its website about who owns or runs the company.
PetronPay’s website domain (“petronpay.com”) was first registered in December 2019. The private registration was last updated on September 17th, 2020.
Marketing videos on PetronPay’s official YouTube channel feature actors with distinctly eastern-European accents.
The earliest videos date back to May 2020. Since then PetronPay has honed in on Africa, which is reflected both in their marketing and website traffic statistics.
Alexa currently ranks Cameroon (22%), Liberia (13%) and Cote d’Ivoire (12%), as the top three sources of traffic to PetronPay’s website.
Further research lead me to PetronPay marketing videos on unofficial channels. These videos cite “Johnny Grant” as CEO of the company.
As with PetronPay’s other videos, Grant is played by an actor with a distinct eastern European accent.
In an attempt to appear legitimate, PetronPay provides a corporate address in Switzerland on its website.
This has already caught the attention of Swiss authorities, who issued a securities fraud warning against PetronPay earlier this year.
One other oddity I noticed it the use of random French words in what is supposed to be PetronPay’s English compensation material. Currency decimals are also represented by commas, as is common across Europe.
As always, if an MLM company is not openly upfront about who is running or owns it, think long and hard about joining and/or handing over any money.
PetronPay has no retail-able products or services, with affiliates only able to market PetronPay affiliate membership itself.
PetronPay affiliates invest funds on the promise of an advertised 0.2% to 2.5% daily ROI:
Investment returns are capped at 300%, after which reinvestment is required to continue earning.
There are eleven affiliate ranks within PetronPay’s compensation plan.
Along with their respective qualification criteria, they are as follows:
PetronPay pays direct commissions via a uni-level compensation structure.
A uni-level compensation structure places an affiliate at the top of a uni-level team, with every personally recruited affiliate placed directly under them (level 1):
If any level 1 affiliates recruit new affiliates, they are placed on level 2 of the original affiliate’s uni-level team.
If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.
PetronPay caps payable uni-level team levels at 6.
10% of funds invested are paid out as direct commissions across these six levels as follows:
PetronPay pays residual commissions via a binary compensation structure.
A binary compensation structure places an affiliate at the top of a binary team, split into two sides (left and right):
The first level of the binary team houses two positions. The second level of the binary team is generated by splitting these first two positions into another two positions each (4 positions).
Subsequent levels of the binary team are generated as required, with each new level housing twice as many positions as the previous level.
Positions in the binary team are filled via direct and indirect recruitment of affiliates. Note there is no limit to how deep a binary team can grow.
Each PetronPay investment tier corresponds with a binary point value:
Points are generated across the binary team when affiliates placed into the team invest.
At the end of each day PetronPay tallies up new points on both sides of the binary team.
Affiliates are paid 50% of points generated on their weaker binary team side.
Once paid out on points are matched against the stronger binary team side and flushed. Any leftover points on the stronger binary team side carry over.
On every group of three personally recruited affiliates, 10% of initial funds invested are paid out as the Three Star Bonus.
PetronPay rewards affiliates for qualifying at Star and higher ranks as follows:
PetronPay affiliate membership fees are tied to how much an affiliate wants to invest:
Upon recording a 300% ROI in the back-office, the above fees are repayable as recurring investment.
PetronPay claims it
represents a privileged investment that allows investors to speculate on the price of a barrel of oil.
In reality its yet another Ponzi scheme through which Europeans are scamming African victims.
There is no evidence of PetronPay having anything to do with oil. Nor is the company registered to offer securities in any jurisdiction.
This means that at a minimum, PetronPay is committing securities fraud and operating illegally the world over (the FMA’s warning is clear evidence of this).
As it stands the only verifiable source of revenue entering PetronPay is new investment.
Using new investment to pay affiliates a 300% makes PetronPay a Ponzi scheme. Paying commissions on funds invested by recruited affiliates adds an additional pyramid layer to the scheme.
As with all MLM Ponzi schemes, once affiliate recruitment dries up so too will new investment.
This will starve PetronPay of ROI revenue, eventually prompting a collapse.
The math behind Ponzi schemes guarantees that when they collapse, the majority of participants lose money.
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