VANCOUVER – A type of pyramid scheme with unbacked virtual shares is operating throughout the Lower Mainland's Chinese community, the British Columbia Securities Commission has warned.
The BCSC says virtual shares in so-called "split games" are being marketed and sold by B.C.-based FullCarry and International Money Tree. The shares, however, don't appear to be backed by underlying assets and they can only be bought and sold online.
Organizers have claimed that increased demand will boost the price of shares and that the shares never lose their overall value. Then, when the price hits a threshold, the shares split. They can double or triple in number, but return to their original price.
BCSC says the organizers have claimed this is a lucrative way of making money, but BCSC says these split games are operating like pyramid schemes in that payouts depend on recruiting new investors. Organizers have also limited how many shares users can convert to conventional currency and charge a 10 per cent transaction fee when they're sold.
"Whenever someone promises high returns with little or no risk, that’s a warning sign," said Doug Muir, the BCSC's director of enforcement.
"These split games, like other pyramid schemes, depend on more and more people buying in. You could easily lose your entire investment."
FullCarry, based in B.C., has held meetings in Vancouver and Richmond and operates a private WeChat group, BCSC says. IMT says it's operated out of Singapore.
Anyone with information about a split game is asked to contact BCSC at 604-899-6854 or 1-800-373-6393 or to file a complaint online.
