EssenceFX Review: Shady “unit investment” trading scheme
EssenceFX provides no information on its website about who owns or runs the business.
In the footer section of its website, EssenceFX represents it is incorporated in Vanuatu.
Vanuatu has emerged as a scam friendly jurisdiction, particularly within the MLM finance niche.
Unless it is based out of Vanuatu, there is no legitimate reason for an MLM company to incorporate itself there.
As opposed to Vanuatu, it is far more likely that whoever is running the company is based out of Malaysia.
At the time of publication Alexa estimates that 98% of traffic to the EssenceFX website originates out of Malaysia.
As always, if an MLM company is not openly upfront about who is running or owns it, think long and hard about joining and/or handing over any money.
EssenceFX has no retailable products or services, with affiliates only able to market EssenceFX affiliate membership itself.
The EssenceFX Compensation Plan
EssenceFX affiliates deposit funds on the expectation of a passive return.
- Standard – invest $100 to $10,000
- Elite – invest $10,001 to $50,000
- Prime – invest $50,001 or more
Higher returns are implied on larger investment amounts.
EssenceFX investment is made in “lots”, of which no specific details are provided.
The MLM side of EssenceFX sees commissions paid on funds invested by recruited affiliates.
EssenceFX pays referral commissions 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.
EssenceFX caps payable unilevel team levels at eight.
Referral commission rates are determined by how much an EssenceFX affiliate has convinced others to invest.
There are two tiers of referral commissions in EssenceFX. Qualifications for each tier are as follows:
- Introducing Broker – recruit at least thirty affiliates who invest $100 or more each, generate at least $5000 in personally recruited affiliate investment volume and at least $15,000 in total unilevel team investment volume
- Master Partner – recruit at least one hundred affiliates who invest $100 or more each, have at least five Introducing Brokers in your unilevel team, maintain at least $1000 in downline monthly investment volume and $3 million in total unilevel team investment volume
Regular EssenceFX affiliates earn the following residual commission rates:
- $2 per lot investment by personally recruited affiliates
- $5 per lot investment by level 1 Introducing Brokers (personally recruited)
- 60 cents per lot investment by level 2 Introducing Brokers
- 30 cents per lot investment by level 3 Introducing Brokers
- 20 cents per lot investment by level 4 Introducing Brokers
- 10 cents per lot investment by level 5 to level 8 Introducing Brokers
For Introducing Brokers and Master Partners, the residual commission rate on level 1 Introducing Brokers is increased to $6.50.
Presumably there are other benefits to qualifying at Master Partner, however these are not disclosed in EssenceFX’s compensation plan.
EssenceFX affiliate membership is free.
Full participate in the attached income opportunity however requires a minimum $100 investment.
EssenceFX attempts to confuse visitors to its website with a barrage of financial trading information.
Beneath that is a simple fraudulent investment scheme with pyramid commissions.
EssenceFX represent external ROI revenue is generated through forex, commodities, precious metal and indicies trading.
No evidence of any of these trading activities is provided.
Furthermore EssenceFX is not licensed to provide financial services in Malaysia, meaning the company is operating illegally in its target investor market.
Pyramid scheme commissions are paid by way of EssenceFX having no retailable products or services. Although it should be noted this is secondary to financial fraud concerns.
And although they don’t seem to have any significant business outside of Malaysia, another red flag is found in EssenceFX’s website footer:
Please note: EssenceFX does not service US-based entities or residents of any kind.
None of the trading activities EssenceFX claims to engage in are illegal in the US. What is illegal is running Ponzi schemes.
Unfortunately the Bank of Malaysia does little more than add fraudulent schemes to a list. The fact of the matter is you’re far more likely to get away running a Ponzi scheme in Malaysia than in tighter regulated jurisdictions.
Obviously those running EssenceFX are aware of this, hence the “no US” and shell company incorporation in Vanuatu.
At the end of the day EssenceFX relies on a constant stream of new investment to stay afloat.
Once affiliate recruitment dies down so too will new investment, eventually prompting a collapse.
The math behind Ponzi schemes guarantees that when they collapse, the majority of investors lose money.