Multi-Level Marketing Systems

Multi-Level Marketing Systems are also fraudulent schemes in the world of ICO

and should be completely avoided by investors. Multi-Level Marketing Systems work based on Multi-Level Tokens (MLT) which are inbuilt in the system. MLT is

an ERC20 token built on the Ethereum blockchain. The token is a derivative

structural product that gives token holders the right to acquire income out of the

increased value of Ethereum. Token holders will also earn ―coupon revenue‖ from a

bonus program built into the token‘s smart algorithm. The bonus is earned through

referrals; therefore, you are encouraged to convince friends and family to buy the

tokens, in order for you to earn. Many Multi-Level Marketing Systems are

fraudulent schemes where the bonus earned is not usually paid out, but rather, the

investors disappear with the income received during referrals.

The Multi-Level Marketing System way of operation can be equated to a Ponzi

scheme, which is a fraudulent investment promising high rates of return with little

risk to investors. The Ponzi scheme generates returns for older investors by

acquiring new investors. Just like the Ponzi scheme, Multi-Level Marketing

Systems focus all their energy on attracting new clients to make investments

through buying tokens. The income earned through the referrals is then utilized as

a return on investment on the project‘s founders. A constant flow of new referrals is

necessary for the scheme to sustain itself, together with the founders. When this

flow runs out, the scheme falls apart, leaving token buyers with huge losses and in

disarray.