Withdrawal of funds from Gemcue investment scheme (GMCE), which the Police has warned is a pyramid scheme, has been disabled.
Over 40,000 Maldivians have invested in the scheme.
Many investors have raised concerns, citing withdrawal of funds from GMCE has been disabled since last night. In a special Telegram group for investors, they have expressed frustration over the inability to access their funds.
Some group members have “assured” the issue will be resolved swiftly, backing their claims with an alleged letter from the U.S Treasury Department. However, it has been proven that the letter is not legitimate.
Meanwhile, many others are urging continued trust in GMCE and encouraging patience.
In a message to the group, GMCE, citing withdrawal of funds was disabled because they have been accused of money laundering, said the issue will be resolved within a few days pending the completion of the review against them.
It has been some time since the GMCE scheme was introduced and gained traction in the Maldives. Investors who have invested money in the scheme have reportedly been paid “profits”.
The scheme is supposedly run by a group of Maldivians in collaboration with a foreign company.
Sun has learned that over 41,500 Maldivians have invested in the GMCE scheme, with a similar number of members present in the official Maldivian Telegram group dedicated to the scheme. They include people of all classes and all sectors. Thousands of people deposit money for the scheme on a daily basis.
GMCE promises two or a higher percentage in return on a basis upon investing a certain amount in the scheme. In an earlier statement, Police said they have been able to confirm GMCE as a pyramid scheme, and as such, has warned action against individuals implicated.
“Although the scheme claims to use artificial intelligence technology for crypto grid trading, this is a lie. At this time, we remind that it is an offence under Article 319 of the Penal Code to sell the right to participate in the pyramid scheme knowingly,” the statement read.
Both Police and the Capital Market Development Authority (CMDA) have strongly advised against investing in such pyramid schemes.
Police emphasized that investing hard-earned money in schemes during an era when there is an increase in fraudulent investment applications on the internet, which leverage languages such as artificial intelligence that the general public is unfamiliar with, will result in irrevocable financial losses.
Police said they are jointly investigating the case alongside CMDA, with assistance from international agencies. In this trajectory, the Police detailed that they, alongside CMDA, were undertaking all efforts necessary to initiate legal action against individuals running, promoting and recruiting participants for the scheme.
Similar pyramid schemes have gone off in the Maldives on previous occasions. Although investors initially recorded profit, they ultimately suffered significant losses.
Although there is no specific law on pyramid schemes in the Maldives, the Penal Code has an article defining ‘pyramid sales scheme’. However, it is very weak in comparison to laws set forth in developed countries.
Pyramid schemes rely on the continuous recruitment of new members to function. Returns in such schemes are generated from the fees paid by new recruits, rather than from the sale of any actual product or service.