Issue link: https://maltatoday.uberflip.com/i/874823
12 maltatoday, SUNDAY, 17 SEPTEMBER 2017 PAUL COCKS A meeting last month between Prime Minister Joseph Muscat and the chief executive officer of a cryptocurrency company has raised alarm bells, amid claims that the man – Michael Mathias – is a well- known affiliate of OneCoin, one of the most notorious Ponzi schemes in cryptocurrencies. Mathias uploaded a photo of him shaking hands with Muscat, say- ing, "The CEO of DAScoin Michael Mathias had a great meeting with Joseph Muscat the PM of Malta. We will be collaborating with the Malta government in the future." DAScoin is an offshoot of One- Coin and claims to be utilising a novel blockchain technology, mak- ing it the most secure yet. However, the company has not yet released any product, although it had vowed to do so by March this year. The post attracted a lot of atten- tion by a number of experts and commentators, who wondered why Muscat would meet Mathias, despite the Maltese government's commitment to embracing crypto- currencies and blockchain in a na- tional strategy. One site dedicated to investigating and reporting on the legality of mul- ti-level marketing (MLM) schemes – also called pyramid selling, net- work marketing, and referral mar- keting – described the whole thing as a "blatant attempt at legitimacy by association". Behindmlm.com noted that one of the lesser-known MLM Ponzi points schemes making the rounds – Net Leaders – is hitched to DAS- coin, having initially launched as Coin Leaders last year. Net Leaders affiliates invest in DAScoin points on the typical "we're gunna be the next bitcoin!" promises. "Net Leaders is your typical Ponzi points scheme. DAScoins to date are not publicly tradeable and are completely worthless outside of the Net Leaders MLM opportunity," the site said. "In what appears to be a blatant at- tempt at legitimacy by association, last week Net Leader affiliates began claiming future collaboration with the Maltese government." The site said that the logic behind these claims – being mainly parrot- ed by Net Leaders affiliates – makes no sense, and insisted no govern- ment in the world was going to hitch their country's economy to Ponzi points, on any level. "That would be an economic dis- aster, which the Malta Financial Ser- vices Authority appears well aware of," behindmlm.com said. "Far more likely this was just some event Michael Mathias gained (paid) ac- cess to, which included a photo-op. When you're peddling Ponzi points it's not like you can market on the legitimacy of the points themselves. And so we have nonsense like this, which is based on little more than a photo of a handshake." Jonathan Galea, president of Bit- Malta, confirmed to MaltaToday that "Michael Mathias is an affili- ate of OneCoin, one of the biggest crypto ponzi schemes". He said that the DAScoin project was being led by NetLeaders (previ- ously known as Coin Leaders), and that the chairman of NetLeaders was John Pretto, one of the most active promoters of the OneCoin Ponzi scheme. "Additionally, the CEO of DAS- coin is Michael Mathias, a well- known OneCoin affiliate although it is unknown whether he is still in- volved in OneCoin or not," BitMalta said in a statement. "Therefore, two infamous OneCoin backers are behind the DAScoin setup, which should already serve as enough red flags to send a bull into full frenzy." BitMalta went on to say that DAS- coin's claims were built on a pipe dream. "The promised product is built on a private blockchain, and for some- thing which is being touted and ad- vertised as "the Bitcoin killer" and "the most secure cryptocurrency", it is ridiculous to have something of that magnitude built on a private blockchain, unlike Bitcoin, which utilises a fully transparent public blockchain," it said. The group went on to slam DAS- coin's credentials and practices. "Although MLM in itself is not necessarily illicit, it is often used for fraudulent purposes, as happens to be the case in DAScoin," it said. "NetLeaders/Coin Leaders has laid out a seemingly-attractive invest- ment scheme whereby the more one invests into DAScoin, the more one receives corresponding tokens, in a non-linear manner (another red flag)." In fact, original investors get a hefty bonus once a certain number of referrals are accumulated in order to encourage other people to join in the scheme. "What makes this project stand out as a scam is that the value of DAScoin is centrally assigned by the people behind DAScoin them- selves, which means that the value of DAScoin is pegged to nothing more than the rate of investment from NetLeaders affiliates," BitMalta said. News Man snapped with prime minister labelled Ponzi scheme affiliate Michael Mathias (left) with the Prime Minister. His company will be collaborating with the government, he said