DEFI Money Club Review: iPro Network fraud continues
Despite being promoted, as far as I know DEFI Money Club doesn’t yet have a website. Or if it does, it’s not being shared with the public.
Why the secrecy?
On November 16th, 2024, serial scam promoter Sal Khan published a YouTube video citing Daniel Pacheco as DEFI Money Club’s CEO.
In addition to CEO, Khan also cites Pacheco as the “creator of DEFI Money Club”.
Daniel Pacheco, aka Danny Pacheco, made a name for himself circa 2013 as a promoter of the Lucrazon Global Ponzi scheme.
Pacheco would go on to launch his own scam, iPro Network, in 2017.
iPro Network was attached to the ProCurrency altcoin (PROC). iPro Network offloaded pre-generated PROC onto its affiliates, on the usual promises of riches.
On the MLM side of things, iPro Network paid commissions on recruitment of new affiliate investors.
By mid 2018 iPro Network itself had collapsed. In a desperate bid to keep the company going the association was PROC was abandoned (typical MLM altcoin exit-scam).
It was around this time that iThrive Network was announced. iThrive Network dropped iPro Network’s crypto Ponzi to solely focus on “education package” pyramid recruitment.
The SEC sued Pacheco in May 2019, alleging iPro Network was a $26 million dollar pyramid scheme.
IPro was a fraudulent pyramid scheme. IPro’s inevitable collapse was hastened by Pacheco’s fraudulent use of investor funds, which included, among other things, the all-cash purchase of a $2.5 million home and a Rolls Royce.
Pacheco’s misappropriation accelerated the rate at which IPro became unable to pay the commissions and bonuses due its investors.
Pacheco’s initial response to the SEC’s lawsuit saw him claim he couldn’t be sued, because “the SEC did not suffer any actual damages”.
Pacheco would go on to settle iPro Network fraud claims with the SEC in December 2022. A $2.1 million final judgment was entered against Pacheco in September 2023.
Now, roughly a year later, Pacheco has resurfaced with DEFI Money Club.
Read on for a full review of DEFI Money Club’s MLM opportunity.
Defi Money Club’s Products
There are three components to DEFI Money Club:
- DEFI Gold Club – a purported “gold backed” NFT investment scheme
- DEFI Trading Academy – education package pseudo-compliance with trading signals service
- Omni – passive returns through purported automated forex trading
DEFI Gold Club sees DEFI Money Club sell NFT investment positions. The company claims the NFT values are pegged to gold, offering potential investors a potential passive ROI.
Access to DEFI Gold Club costs between 500 and 7000 tether (USDT):
- Gold 1 – 500 USDT access fee, able to invest up to ($10,000?) with a 10% investment bonus
- Gold 2 – 1000 USDT access fee, able to invest up to $25,000 with a 15% investment bonus
- Gold 3 – 3000 USDT access fee, able to invest up to $50,000 with a 20% investment bonus
- Gold 4 – 7000 USDT access fee, able to invest up to $100,000 with a 25% investment bonus
DEFI Trading Academy is a trading signals service bundled with trading education courses.
Note that in violation of US commodities law, DEFI Money Club fails to disclose the origin of DEFI Trading Academy signals.
Access to DEFI Trading Academy is 1800 USDT annually.
Omni offers investors passive returns through purported forex trading.
Omni operates using the “lulz can’t touch our money!” model. The “lulz can’t touch our money!” model allows affiliates to invest funds in their own exchange account.
This is done on the promise of passive returns, derived through Omni’s purported trading of unknown origin.
Access to Omni costs between 500 and 7000 USDT:
- access to one trading strategy = 500 USDT annually
- access to three trading strategies = 1000 USDT annually
- access to seven trading strategies = 2000 USDT annually
- access to fifteen trading strategies = 4000 USDT annually
- access to all trading strategies = 7000 USDT annually
Omni also charges a 20% monthly fee on generated returns.
DEFI Money Club’s Compensation Plan
DEFI Money Club’s compensation plan pays on the sale of its services to retail customers and recruited affiliates.
DEFI Money Club Affiliate Ranks
There are seven affiliate ranks within DEFI Money Club’s compensation plan.
Along with their respective qualification criteria, they are as follows:
- Consultant – sign up as a DEFI Money Club affiliate and generate 1000 GV
- Senior Consultant – generate 3000 GV
- Executive Consultant – generate 50,000 GV
- Director – generate 100,000 GV
- Senior Director – generate 200,000 GV
- Executive Director – generate 500,000 GV
- Senior Vice President – generate 1,000,000 GV
GV stands for “Group Volume”. GV is sales volume generated via the sale of DEFI Gold Club, DEFI Trading Academy and Omni to retail customers and recruited affiliates.
Note that for the purpose of rank qualification, no more than 40% of required GV can come from any one unilevel team leg.
Referral Commissions
DEFI Money Club pays a 10% referral commission on sales volume (GV) generated by DEFI Gold Club, DEFI Trading Academy and Omni access sales.
DEFI Gold Club
- sale of Gold 1 DEFI Gold Club NFT position = 35 USDT referral commission
- sale of Gold 2 DEFI Gold Club NFT position = 70 USDT referral commission
- sale of Gold 3 DEFI Gold Club NFT position = 210 USDT referral commission
- sale of Gold 4 DEFI Gold Club NFT position = 490 USDT referral commission
DEFI Trading Academy
- sale of DEFI Trading Academy = 1000 GV
Omni
- sale of one Omni strategy = 500 GV
- sale of three Omni trading strategies = 700 GV
- sale of seven Omni trading strategies = 1400 GV
- sale of fifteen Omni trading strategies = 2800 GV
- sale of all Omni trading strategies = 4900 GV
- 10% of the 20% monthly fee on DEFI Trading Academy earnings is also paid out as a referral commission
Residual Commissions
DEFI Money Club 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.
At the end of each week DEFI Money Club tallies up new sales volume on both sides of the binary team.
Affiliates are paid 10% of new sales volume generated on their weaker binary team side.
Once paid out on, sales volume is matched against the stronger binary team side and flushed. Any leftover volume on the stronger binary team side carries over.
Matching Bonus
DEFI Money Club pays a Matching Bonus 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.
DEFI Money Club caps the Matching Bonus at seven unilevel team levels.
The Matching Bonus is paid as a percentage of earnings from downline affiliates across these seven levels based on rank:
- Consultants earn a 10% match on level 1 (personally recruited affiliates)
- Senior Consultants earn a 10% match on levels 1 and 2
- Executive Consultants earn a 10% match on levels 1 to 3
- Directors earn a 10% match on levels 1 to 4
- Senior Directors earn a 10% match on levels 1 to 5
- Executive Directors earn a 10% match on levels 1 to 5 and 5% on level 6
- Senior Vice Presidents earn a 10% match on levels 1 to 5 and 5% on levels 6 and 7
Leadership Bonus
Using a separate set of ranks, DEFI Money Club rewards affiliates for reaching monthly GV targets:
- Silver – generate 200,000 GV in a month and receive 2000 USDT
- Ruby – generate 500,000 GV in a month and receive 7500 USDT
- Emerald – generate 1,000,000 GV in a month and receive 10,000 USDT
- Sapphire – generate 2,000,000 GV in a month and receive 20,000 USDT
- Gold – generate 3,000,000 GV in a month and receive 30,000 USDT
Joining DEFI Money Club
DEFI Money Club affiliate membership is 50 USDT annually.
DEFI Money Club Conclusion
As per the Howey Test, there are two clearly identifiable investment contracts within DEFI Money Club:
- passive returns generated via DEFI Gold Club NFT positions
- passive returns generated via Omni’s purported automated forex trading
Neither of these two offerings is illegal outright, but in order to be made legally require registration with the SEC.
At time of publication neither DEFI Money Club, DEFI Gold Club, DEFI Trading Academy, Omni or Daniel Pacheco are registered with the SEC.
This constitutes securities fraud, which Pacheco is explicitly prohibited from committing further acts of as per his iPro Network settlement injunction.
Additionally, Omni’s purported trading for forex to generate passive returns requires it to register with the CFTC. A search of the NFA’s BASIC database reveals none of the DEFI Money Club entities are registered with the CFTC.
This adds commodities fraud to DEFI Money Club’s chargesheet.
Directly addressing the legality of DEFI Marketing Club, in the previously cited interview with Sal Khan, Pacheco states at [15:54];
Here in the United States, as you know, we’ve gone through all of the legal hurdles, all of the legal challenges.
We’ve structured with one of our co-founders of Omni, and I’m not a co-founder of Omni, but you know I know the structure there cause we’ve had a relationship for the last decade, and our attorney, not only is he a licensed attorney that turned out judgeship to be working 100% on Omni, but he holds the licensing right, the credentials and the series three and the series sixty-three.
All of the different licenses that he needs to be one of about a thousand people in the US that, because of his experience and his licensing, allows Omni to be a legal product here in the US with an actual exemption that other, that just doesn’t exist.
It should be obvious that, contrary to Pacheco’s claims, neither securities or commodities fraud is legal in the US.
To reiterate a point, as Pacheco states in his interview with Sal Khan at [34:50];
You’re making money every month on Omni … oh by the way you’re making another, you know, 10% a month on full automation.
An unnamed attorney whose identity is hidden from consumers is not the equivalent of or substitute for an MLM company offering passive returns registering with the SEC and/or CFTC (NFA).
As with iPro Network, it is clear that DEFI Money Club is intended to be run as a pyramid scheme.
While retail sales are possible, DEFI Money Club’s own official training instructs new recruits to focus solely on recruiting:
An MLM company focusing solely on recruitment at the expense of retail sales is the classic MLM pyramid model.
This, combined with Pacheco’s prior securities fraud settlement, is enough to steer clear of DEFI Money Club.
Breaking down DEFI Money Club’s offering further however;
The gold side of DEFI Gold Club ties into DEFI Money Club claiming to have a partnership with Mac Mining Group.
Mac Mining Group is a faceless company put together in November 2023, two months after Pacheco’s iPro Network judgment was finalized.
On its website Mac Mining Group claims to be based out of Nevada. The company also directly solicits investment from the public;
By joining our community of investors, you’re not just taking a financial stake in our gold mine project; you’re becoming a part of a rich mining legacy in the making.
This isn’t merely an investment; it’s an opportunity to contribute to the history of Nevada’s gold industry, to be among those who believed in the potential of this region and helped shape its future.
Together, we’re forging a path toward sustainable and responsible mining practices, creating a lasting impact on both the local economy and the global gold market.
A search of the SEC’s Edgar database reveals Mac Mining Group is not registered to offer securities in the US. This means the investment side of Mac Mining Group is also fraudulent (securities fraud).
The education packages tied to DEFI Trading Academy are essentially a continuation of that side of iPro Network and iThrive Network (I suppose iDefi Trading Academy was too obvious).
Omni is accessed through an app, with listings on both the Google and Apple app stores.
Omni’s Google Play store listing gives us some additional information about the company:
“Steve” refers to Steve Mata, who cites himself as Omni’s CEO.
In a November 12th interview with Sal Khan, Mata (right) cites “Dylan” as the other co-founder of Omni.
Mata appears to be a California-based fitness bro turned app bro. Mata also isn’t registered with the SEC or CFTC.
The Enigma domain in Steve’s app email address hosts an an email harvester website:
The “get Omni” domain hosts Omni’s standalone website. On the website we find marketing featuring Daniel Pacheco and boasting an 85% trading win rate:
Otfs Inc. is a Delaware shell company registered in May 2024.
Omni’s “lulz can’t touch our money!” model sees it dupe investors into believing their funds can’t be stolen because they are traded in their own broker/exchange accounts.
This is false. Typically “lulz can’t touch our money!” schemes exit-scam through blowing the bot up or rigged trades.
Undermining every “lulz can’t touch our money!” scheme is the fact that if the purported trading was profitable in the long-term, scammers would just deploy it for themselves.
Pending Omni trading losses are in addition to funds lost through its pyramid scheme. This alone will affect the majority of Omni affiliates when said pyramid scheme inevitably collapses.
Yet another red flag is DEFI Money Club’s potential ties to Dubai.
In the previously cited Steve Mata interview with Sal Khan, at [38:35] Mata states;
We have all these traders and um, it’s a combination of like traders you know, hedge funds, etc. coming to us right now.
Like for example, um you know, we had this you know a couple of hedge funds in Dubai. Um there’s one in particular that um has over one hundred strategies. They have around $100 million in their fund that they trade with, right?
So they’re taking a number of the strategies and want to make them available to retail traders and they’re using Omni at a platform to distribute that.
Due to the proliferation of scams and failure to enforce securities fraud regulation, BehindMLM ranks Dubai as the MLM crime capital of the world.
BehindMLM’s guidelines for Dubai are:
- If someone lives in Dubai and approaches you about an MLM opportunity, they’re trying to scam you.
- If an MLM company is based out of or represents it has ties to Dubai, it’s a scam.
Finally we’ll circle back around to iPro Network and the title of this review; “iPro Network fraud continues”.
DEFI Money Club’s official DEFI Trading Academy marketing cites DNERO:
DNERO is a shitcoin Pacheco launched as part of iThrive Network, after iPro Network and PROC collapsed.
DNERO first came on BehindMLM in May 2019, as part of a discussion on the SEC’s iPro Network fraud charges.
This iPro Network victim group on FaceBook also cites Pacheco launching DNERO after iPro Network:
Today DNERO survives as “DNERO Protocol”.
DNERO Protocol operates from the domain “dneroproject.io”, privately registered in May 2022.
Obviously nobody outside of iPro Network and iThrive Network is going to be holding DNERO. Its acceptance within DEFI Money Club demonstrates Pacheco targeting iPro Network and iThrive Network victims.
In other words, DEFI Money Club and everything attached to it is a literal continuation of the fraud Pacheco started with iPro Network.
Within DNERO, we have yet another unregistered securities offering:
As above the DNERO Project, which again Danny Pacheco owns, solicits investment on the pitch of passively turning $10,000 into $200,000.
While DEFI Money Club doesn’t have a website, or said website is hidden from consumers, DNERO’s website serves as an access portal for DEFI Money Club:
I’m pretty sure the reason DEFI Money Club doesn’t have a readily accessible public website, is because DNERO’s website has been repurposed as the defacto DEFI Money Club website.
Why doesn’t DEFI Money Club just have a standalone website where everything is openly disclosed to consumers?
Look no further than the multitude of DEFI Money Club red flags raised in this review.
