Cash FX – Scam Warning

We have heard recently about a project called Cash FX and that some people have had problems withdrawing funds from it.

A couple of our members have asked us to take a look at the platform as to whether it’s a scam.

Having looked at the platform, there are some warning signs for us that this could be a scam/Ponzi scheme.

As we have said many times before however, you never know for sure if something’s a scam until a project does actually go bust and is revealed as a Ponzi scheme. All you can do in the meantime is look at its characteristics, whether they fit the profile of a scam and the likelihood that its payouts can be maintained in the long run.

So we will have a look at the key characteristics of Cash FX below and what we can determine from that information.

What is Cash FX?

Cash FX is a forex trading and training company based in Panama. They operate a MLM (multi-level-marketing) scheme which encourages people to sign up as affiliates and create a network of affiliates below them.

Cash FX have a range of “packages” which people claim pay out between 5% and 15% profit per week. You are only able to purchase these packages using Bitcoin.

There is also a training academy aspect to the platform, through which they offer a forex-based curriculum in 3 interactive learning series, the Elemental, Advanced, and Supreme, to help traders go from beginner to expert.

There is no information about the team behind Cash FX and we understand these details have recently been removed from the website.

How Does Cash FX Make Its Money?

One of the classic characteristics of a HYIP (high yield investment program) or modern-day internet Ponzi scheme is that it’s quite difficult to see what the company actually does to generate its profit. We have seen this with another platform we are looking at the moment and are suspicious of, Tradenamic.

On the Cash FX website it says:

“We use software called Expert Advisors (EAs), specially designed for Cash Forex Group, with algorithms that allow you to analyze different types of scenarios in the currency markets, obtaining successful results…With Cash Forex Group we will associate you with the best group of traders internationally, with a combined experience of more than 15 years.”

However, we can find no details of their trading results on the Cash FX website nor any evidence of their actual profits.

There are no details of who the traders are, their specific strategies or verified track records through a site like myfxbook. It’s all quite vague and there’s lots of superfluous information about teaching people about trading, their “core values” and “goals” and some general information about copy-trading.

For them to be able to generate 5-15% per week consistently week after week they would have to be some of the top traders in the world, so we are sceptical of such results.

How Do the “Packages” Work?

After you sign up to Cash FX you have the chance to invest in “packages” which have (up until recently) reportedly provided the high returns described above. These packages range from $300 at the lowest level all the way up to $100,000 at the top level, with many intermediate levels in between.

Supposedly 70% of the fees you pay go towards the Expert Advisor trading mentioned above, but as we say there is no proof any trading has actually taken place. The remaining 30% goes towards the Academy fees and the company’s own costs.

They also have to pay the many levels of multi-level marketing affiliate fees, which must add up to quite a lot given how many levels there are to the MLM scheme.

Once you have purchased one of the packages, there is a 130 day lock up period, with a 20% penalty fee for withdrawing before the end of that period.

This is something that gives us further cause of concern, as it makes it difficult for people to get their money out if things look like they might be going wrong with the platform (as seems to be happening now).

What Are the Warnings Signs?

There are a number of troubling signs for us about Cash FX. These can be summarised as follows:-

• First and foremost the daily payouts are simply not sustainable. If you invested $1,000 and made 1% per day on it (and compounded the returns), after one year you would have $37,000 and after two years you would have $1.4m. Imagine thousands of people doing that and it becomes clear it is simply not sustainable. Or if just one person invested $100,000, they would make $142m after two years if compounding their returns…
• As mentioned above there’s a lack of transparency about their supposed trading returns, with no evidence of results and only vague information about what they actually do and how they (supposedly) generate a profit.
• Multi-level marketing (MLM) is a classic sign of a scam or Ponzi scheme, particularly when associated with the other traits seen here.
• Payments can only be made in Bitcoin. This is strange as it is a forex trading scheme so why do they only accept payment in Bitcoin and not regular bank transfers/card payments? Well obviously it is much easier to hide Bitcoin and to move it through accounts anonymously as it is difficult to track.
• The other side of taking payments in Bitcoin is that it presents an opportunity for them to make a profit purely out of the rising price of Bitcoin, without even needing to do any trading or other activity. However, if the price of Bitcoin were to fall, this could present difficulties.
• Lack of transparency about the team. There is no information on the website about who the team members behind Cash FX are. We understand details of team members have recently been removed from the website. This is a big red flag and something we have seen with a number of Bitcoin-related Ponzi schemes in the past.
• Reports of difficulties withdrawing funds. We have heard that some people have had difficulties withdrawing funds. This is another red flag and is typically associated with a project about to “exit-scam” (or run off with people’s money, in other words).
• Social media accounts of Cash FX have started to disappear/be removed
• Warnings from major regulatory agencies – there have been over 20 warnings from regulatory agencies around the world about Cash FX, including from the FCA in the UK.

Conclusion – Scam Warning

This project has many of the tell-tale signs of a Ponzi scheme or scam to us. It’s payouts are not sustainable and it reminds us of many similar cryptocurrency-related schemes that have proliferated over the last few years like Bitconnect, Ethconnect and USI Tech.

Recent events suggest they may be in the process of exit-scamming so we will certainly not be putting any funds into this platform and we would be extremely cautious if you were considering doing so. Or if you are already in the platform, we would suggest you consider taking your money out.

There are a large number of red flags about this project and we only hope if it all does come crashing down that people don’t lose too much money in the process.