Crowd1 Review: “Owner rights” virtual shares investment fraud
Crowd1 provides no information on their website about who owns or runs the business.
Crowd1’s website domain (“crowd1.com”) was first registered back in 2007. The domain registration was last updated in October 2018.
Stelios Piskopianos of Crowd1 Network Europe Ltd is listed as the owner, through an address in Cyprus.
Cyprus is a scam-friendly jurisdiction with little to no MLM regulation.
According to his LinkedIn profile, Stelios Piskopianos has a financial services background.
A commercially aware, hands-on Senior Finance Professional with considerable experience of financial and business control across a broad spectrum including strong IT skills and extensive knowledge of computerised information systems.
Piskopianos (right) is currently Finance Director of AOS Fluency Limited (“business process outsourcing”) and Northfield Petroleum Limited (private equity investment firm).
Curiously, Crowd1 does not appear on Piskopianos’ LinkedIn profile.
Whether Piskopianos is working alone or with others to run Crowd1 is unclear.
Update 23rd March 2020 – Stelios Piskopianos appears to be a fall guy. Crowd1’s Spanish shell company records reveal Jonas Erik Werner is running the company from Sweden. /end update
Read on for a full review of the Crowd1 MLM opportunity.
Crowd1 has no retailable products or services, with affiliates only able to market Crowd1 affiliate membership itself.
Crowd1’s Compensation Plan
Crowd1 affiliates invest funds on the promise of advertised returns.
Crowd1 tracks and pays out returns through “owner rights” shares.
- White – invest €99 EUR and receive €100 EUR worth of owner rights shares
- Black – invest €299 EUR and receive €300 EUR worth of owner rights shares
- Gold – invest €799 EUR and receive €1000 EUR worth of owner rights shares
- Titanium – invest €2499 EUR and receive €3500 EUR worth of owner rights shares
Crowd1 pays residual commissions via a binary compensation structure.
A binary compensation structure places an affiliate at the top of a binary team, split into two sides (left and right):
The first level of the binary team houses two positions. The second level of the binary team is generated by splitting these first two positions into another two positions each (4 positions).
Subsequent levels of the binary team are generated as required, with each new level housing twice as many positions as the previous level.
Positions in the binary team are filled via direct and indirect recruitment of affiliates. Note there is no limit to how deep a binary team can grow.
Residual commissions are paid based on investment volume generated on both sides of the binary team.
Investment volume is tracked via points, which correspond with Crowd1’s investment tiers as follows:
- White – 90 points
- Black – 270 points
- Gold – 720 points
- Titanium – 2250 points
Crowd1 calculates residual commission using what they call a “1/3 balance” ratio.
A 1/3 balance ratio sees residual commissions paid out on investment volume generated on the weaker side of the binary team.
This volume is matched in triple against the stronger binary team side (assuming matching volume is available).
Once payable volume is tallied up, affiliates receive 10% of the total volume amount.
E.g. a recruited affiliate signs up at the White tier and is placed on your weaker binary team side.
This generates 90 points on the weaker binary team side, which is matched with 270 points from the stronger binary team side.
This calculates to 360 points in total.
A 10% residual is calculates on this point total, coming to €36 EUR.
Note that if 270 points doesn’t exist on the stronger binary team side, the system will try to match either double or an equal amount of points from the stronger binary team side.
If there isn’t enough to match the weaker binary team side, only 10% on the weaker binary team side points is paid out.
Crowd1 pays a Matching Bonus on residual commissions earned by downline affiliates.
The Matching Bonus is paid out via a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):
If any level 1 affiliates recruit new affiliates, they are placed on level 2 of the original affiliate’s unilevel team.
If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.
Crowd1 caps payable Matching Bonus unilevel team levels at five.
How many levels a Crowd1 affiliate earns the Matching Bonus on is determined by an affiliate’s personal recruitment efforts:
- invest at the White tier and recruit four investors = a 10% match on level 1 (personally recruited affiliates)
- invest at the Black tier and recruit eight investors = a 10% match on levels 1 and 2
- recruit twelve investors = a 10% match on levels 1 to 3
- invest at the Gold tier and recruit sixteen investors = a 10% match on levels 1 to 4
- invest at the Titanium tier and recruit twenty investors = a 10% match on levels 1 to 5
The Streamline Bonus appears to be a way to increase owner rights share returns.
Crowd1 tracks the Streamline Bonus via company-wide recruitment. You sign up and everyone who joins after you falls in your Streamline Bonus.
There are “streamline levels” that correspond with how much a Crowd1 affiliate has invested:
- White tier affiliates receive three Streamline levels
- Black tier affiliates receive eight Streamline levels
- Gold tier affiliates receive twelve Streamline levels
- Titanium tier affiliates receive fifteen Streamline levels
Other than stating “all Streamline Bonus is payed out in exclusive limited Owner rights”, Crowd1 fails to explain how exactly the Streamline Bonus is paid out.
Fear of Loss Bonus
The Fear of Loss Bonus is a recruitment bonus, active during a newly recruited Crowd1 affiliate’s first fourteen days with the company.
During the Fear of Loss Bonus period, a Crowd1 affiliate earns
- €125 EUR per four White investment tier affiliates recruited
- €375 EUR per four Black investment tier affiliates recruited
- €1000 EUR per four Gold investment tier affiliates recruited
- €3000 EUR per four Titanium investment tier affiliates recruited
By convincing others to invest, Crowd1 affiliates can increase their share of company-wide gambling revenue.
The Gambling residual starts at 5% at the Team Leader rank (generate 500 points in weaker binary team volume), and increases to 10% for the Director (generate 500,000 points in weaker binary team volume) and higher ranks.
Crowd1 affiliate membership is tied to a €99 to €2499 EUR investment.
- White – €99 EUR
- Black – €299 EUR
- Gold – €799 EUR
- Titanium – €2499 EUR
Crowd1 presents an open-ended investment MLM opportunity (no formal ROI structure), with pyramid recruitment to drive new investment.
Supposedly, Crowd1 generates revenue through online gambling.
Currently the most profitable industry is the gaming industry.
Crowd1 shall introduce our customer base to this industry in a
way that will create substantial recurring revenue for Crowd1
members without being a gaming company and without
arranging any payments to a gaming company.
Although it claims to generate external revenue through gambling activities, Crowd1 maintains it ‘must not be mistaken for a gaming or gambling company.‘
The gambling revenue is purportedly generated through third-party providers, which Crowd1 solicits through their Affilgo platform.
The Crowd1 customer base is then introduced to external partners through Affilgo, in the form of licensed gaming companies, where agreements are made for profit sharing.
As above, Crowd1 == Affilgo.
Naturally no information about any of the supposed gaming partners Crowd1 has is provided.
Yet despite that, the company simultaneously touts accumulated returns of 450%.
If we pull Crowd1’s business model apart, it quickly becomes apparent its a regulatory minefield on multiple fronts.
Gaming is strictly regulated the world over. Hence Crowd1 being shady about who their providers are, and clarification that they themselves don’t offer gambling services.
This is a regulatory concern in and of itself. With respect to the Crowd1’s MLM opportunity, the more pressing concern is the passive investment opportunity offered through “owner rights” shares.
The earlier you join during prelaunch, the more beneficial the Owner Rights program will be for you, as the Owner Rights will steadily increase in value.
All pioneers and members will be able to get a very good return on their Owner Rights since the user base will increase massively.
Crowd1’s owner rights investment opportunity is a securities offering, which requires registration with financial regulators.
Crowd1 provides no evidence it has registered with any financial regulator – namely in South Africa, the Netherlands and Colombia, which Alexa currently pegs as top sources of traffic to Crowd1’s website.
Having not registered with financial regulators, Crowd1 is thus operating illegally in every country it solicits investment in.
The only reason an MLM company would opt to operate illegally, is if it isn’t doing what it says it is.
In the case of Crowd1, that would be using external gaming revenue to pay out owner rights shares returns.
As it stands the only verifiable source of revenue entering Crowd1 is new investment.
Supporting the fact that Crowd1 has in fact no external revenue, is the 450% return claim weighed against the fact that Affilgo hasn’t even opened yet.
Using new investment to pay owner rights share returns to existing affiliates would make Crowd1 a Ponzi scheme.
On top of that you have recruitment commissions, adding a pyramid layer to the scheme (again illegal the world over).
As with all MLM Ponzi schemes, once affiliate recruitment slows down so too will new investment.
This will starve Crowd1 of return revenue, eventually prompting a collapse.
The math behind Ponzi schemes guarantees that when they collapse, the majority of participants lose money.