The Commerce Commission has issued a 'stop now' notice to the promoter of what it believes may be a pyramid scheme.
Shelly Cullen, who promoted Lion's Share online, was issued the notice on December 21, and it was made public on Tuesday.
By Bronson Perich
Cullen, a "baller on a budget", caught the attention of the media after she posted a video on YouTube claiming that she had made $154,000 in 11 days from Lion's Share. The video documenting her claims was removed to comply with the stop now order.
Lion's Share recruits were encouraged to buy packages or 'money trees' by exchanging NZ dollars for cryptocurrency. The cryptocurrency was then deposited into a smart contract.
The recruits were promised a "Lion's Share" of commissions if they were successful in convincing others to join. They were entitled to higher pay-outs if they purchased more packages and convinced their recruits to follow suit.
The pay-outs were to be made in the same cryptocurrency that the recruit paid in.
As of December 21, 2020, Cullen is prohibited from promoting Lion's Share or any other pyramid scheme.
CRYPTOCURRENCY 'SMART CONTRACTS'
Freelance IT administrator Aaron Maoate describes smart contracts as "digital contracts with conditions".
He adds that smart contracts can be programmed to do anything from counting election votes to running pyramid schemes.
It is Maoate's opinion that the smart contract at the core of Lion's Share is running a pyramid scheme.
"Once you deposit your money into the smart contract, it's gone," Maoate says.
"The only way for you to get your money back is to scam others into joining the scam."
He claims Cullen's been involved in crypto Ponzi schemes for many years and that she's given newcomers to cryptocurrency a bad impression.
Attempts to contact Cullen are ongoing.
Pyramid schemes are illegal under the Fair Trading Act.
While they often taken many forms, they often offer a financial return based on payments made by new recruits - not the sale of a product or service.
Those near the bottom of the pyramid are unlikely to ever see a return on their "investment".