Paraiba Review: Fake bank daily ROI crypto trading Ponzi
Paraiba provides no information on its website about who owns or runs the company.
Paraiba’s website domain (“paraiba.world”) was privately registered on September 16th, 2019.
In an attempt to appear legitimate, Paraiba provides an incomplete corporate address in the Comoro Islands.
The Comoro Islands are a series of small islands off the south-east coast of Africa.
Needless to say Paraiba has no physical business operations there.
Paraiba marketing material cites Erich Ely as CEO of the company.
Ely (right) is supposedly from Germany. Possibly due to language-barriers, I was unable to put together an MLM history.
Update 7th September 2020 – BehindMLM reader PassingBy has uncovered that prior to founding Paraiba, Erich Ely was a German promoter of the OneCoin Ponzi scheme.
PassingBy also uncovered Paraiba received a securities fraud notice from BaFin in June. /end update
At the time of publication Paraiba appears to be primarily marketed in Honduras. Alexa cites Honduras as the only notable source of traffic to Paraiba’s website (43%).
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.
Paraiba has no retailable products or services, with affiliates only able to market Paraiba affiliate membership itself.
Paraiba’s Compensation Plan
Paraiba affiliates invest $25 or more on the promise of an advertised daily return.
- invest up to $49,999 and receive 0.3% a day
- invest $50,000 or more and receive 0.5% a day
Return are paid for 100 days, after which the initially invested amount is also returned (total ROI: 130%/150%).
Note that to qualify for commissions, a Paraiba affiliate must have an active investment of $100 or more.
Paraiba affiliates earn commissions on funds invested by personally recruited affiliates.
Recruitment commission rate are calculated based on the number of personally recruited affiliates:
- recruit 1 to 4 affiliates and receive a 0.05% recruitment commission rate
- recruit 5 to 9 affiliates and receive a 0.1% recruitment commission rate
- recruit 10 to 19 affiliates and receive a 0.2% recruitment commission rate
- recruit 20 or more affiliates and receive a 0.3% recruitment commission rate
Note that in order to count towards recruitment commission qualification, personally recruited affiliates must invest at least $100.
Paraiba pays residual 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.
There doesn’t appear to be any unilevel team level restrictions, with residual commissions paid on the full unilevel team.
Residual commission rates are calculated based on the following qualification criteria:
- invest $1000 and recruit 1 to 4 affiliates who also invest $1000 or more each = 0.01% residual commission rate
- maintain a $1000 investment and recruit 5 to 9 affiliates who’ve also invested $1000 or more each = 0.02% residual commission rate
- maintain a $1000 investment and recruit 10 to 19 affiliates who’ve also invested $1000 or more each = 0.03% residual commission rate
- maintain a $1000 investment and recruit 20 or more affiliates who’ve also invested $1000 or more each = 0.04% residual commission rate
Rank Achievement Bonus
There are six affiliate ranks within Paraiba’s compensation plan.
Along with their respective qualification criteria, they are as follows:
- Yellow – personally invest $1000, recruit at least one affiliate and generate $1000 or more in personally recruited affiliate investment volume
- Blue – personally invest $5000, recruit two to four affiliates (two must be Yellow) and generate $2000 or more in personally recruited affiliate investment volume
- Green – personally invest $10,000, recruit five to nine affiliates (one must be Blue) and generate $5000 or more in personally recruited affiliate investment volume
- Purple – personally invest $15,000, recruit ten to nineteen affiliates (two must be Green) and generate $10,000 or more in personally recruited affiliate investment volume
- Red – personally invest $20,000, recruit 20 or more affiliates (three must be Purple) and generate $20,000 or more in personally recruited affiliate investment volume
- Paraiba – personally invest $50,000, maintain 20 personally recruited affiliates (five must be Red) and maintain $20,000 or more in personally recruited affiliate investment volume
Rank Achievement Bonuses paid out upon qualifying for the above ranks are as follows:
- qualify at Yellow and receive $10
- qualify at Blue and receive $100
- qualify at Green and receive $1000
- qualify at Purple and receive $5000
- qualify at Red and receive $15,000
- qualify at Paraiba and receive $25,000
Note that these are one-time bonuses.
Paraiba takes 0.35% of company-wide invested funds and places them into seven bonus pools.
Each pool is split 0.05% and paid out daily as per the following qualification criteria:
- Pool 1 – personally invest $1000, recruit at least one affiliate and generate $1000 in total personally recruited affiliate investment
- Pool 2 – personally invest $5000, recruit at least three affiliates and generate $5000 in total personally recruited affiliate investment
- Pool 3 – maintain a $5000 personal investment, recruit at least five affiliates and generate $15,000 in total personally recruited affiliate investment
- Pool 4 – personally invest $10,000, recruit at least ten affiliates and generate $35,000 in total personally recruited affiliate investment
- Pool 5 – personally invest $15,000, recruit at least fifteen affiliates and generate $95,000 in total personally recruited affiliate investment
- Pool 6 – personally invest $20,000, recruit at least twenty affiliates and generate $180,000 in total personally recruited affiliate investment
- Pool 7 – personally invest $50,000, maintain at least twenty personally recruited affiliates and generate $500,000 in total personally recruited affiliate investment
Paraiba affiliate membership is free.
To qualify for commissions however, a minimum $100 active investment is required.
Paraiba investment terms expire every 100 days. Reinvestment is required to continue earning.
Paraiba markets itself as a “unique private bank”. Beyond a shell incorporation for “Unique Private Bank” in Moheli (one of the Comoro Islands), that is meaningless drivel.
I’m not even going to get into the financial regulatory ramifications of pretending to be a bank, because beneath the marketing pitch Paraiba is your typical MLM crypto Ponzi scheme.
Paraiba represents it generates return revenue via cryptocurrency trading.
No evidence of trading is provided. Nor is there any evidence Paraiba uses external revenue of any kind to pay advertised returns.
Furthermore by offering passive returns, Paraiba is offering a security.
Securities in Honduras are regulated by the Central Bank of Honduras. Paraiba provides no evidence it has registered its securities offering with the Central Bank of Honduras, or any financial regulator for that matter.
This means that, at a minimum, Paraiba is committing securities fraud and operating illegally. Add banking fraud to that, and we’re still not done.
As it stands the only verifiable source of revenue entering Paraiba is new investment.
Using new investment to pay affiliates a daily return makes Paraiba a Ponzi scheme.
As with all MLM Ponzi schemes, once affiliate recruitment dries up so too will new invesmtent.
This will starve Paraiba of ROI revenue, eventually prompting a collapse.
The math behind Ponzi schemes guarantees that when they collapse, the majority of participants lose money.
I thought I’d do a quick check on that, by having Google return search results in just German and English (you can’t switch off the English ones, it seems). Even though “Ely” isn’t a common last name, I looked on “erich ely bank” to narrow it down a bit.
OK, first things first: Paraibe has already gotten the standard consumer warning for illegal securities dealing by the German regulator BaFin:
But I only got to that after first looking for Mr Ely.
General conclusion: Erich Ely does exist, but he is a quite obscure figure.
His LinkedIn page has absolutely no information about him, he doesn’t have any past activities he cares to mention, nor even the current Paraiba one, except that he’s worked in “sales” for over 20 years (but it’s definitely him, as confirmed by a Paraiba associate):
The first thing with his name I found is some Paraiba advertising in German, where Ely is quoted making the preposterous claim that because Paraiba is a “Privatbank” (a German term that is not related to the English term “private banking”, and only refers to the ownership structure of a bank), it isn’t subject to banking oversight legislation within the EU. Yeah, right.
Paraiba initially, from early 2020, seems to have targeted the German-speaking countries, where besides Erich Ely two names occur as public faces, which I’ll just include here just in case anything further about them pops up: Mario Schmietendorf and Michael Großmann.
This activity led to the BaFin warning in June, which must be why they’re now trying elsewhere in the world.
The second, much more revealing thing I found is here:
This is a discussion thread following an article about Onecoin from November 2015. The article starts, in large bold letters, with this: “Onecoin is a scam/fraud.
So you can scroll to the conlusion right away”. In the comments, someone posted that on April 21, 2016, Erich Ely held a Onecoin sales event in the southern German town of Waldshut (on the Swiss border).
Given that it’s a rare last name, and the location fits with where the Paraiba Ely is based (Bavaria), this was unlikely to be just a namesake.
So I did another search on “erich ely onecoin”. Even in that capacity, he seems to have been pretty obscure. But the search does lead to an article from February 2020, this time about Paraiba:
The author pretty much says that Paraiba bears all the hallmarks of a fraud, without using that word. Because it’s all so shady, he also asks readers (of a site for crypto-enthusiasts) to possibly provide more information.
This lead to this exchange in the comments (my translation, Alexander Brodsinskij is the author of the original article, stuff between square brackets is me):
There is also a follow-up article, from the same, generally uncritical, author, which confirms we’re talking about the same Erich Ely throughout.
So to sumarize: small-time former Onecoin peddler, now nominal boss (but possibly just a figurehead) of a small-time, Germany-based, scam.
Ah so BaFin are already aware. And yeah I had trouble with the German, so didn’t get very far.
Thanks for doing further research!
Paraiba is a legal company operating since October 2019. It has a unique trading system that protects users’ funds against exchange blockades and theft by employed traders.
The company has many trading accounts and many traders. Traders receive 10-15% of the profit they make.
If they lose, they have to cover the losses from their own funds. This data is not public, however, any interested person can meet Eric and see the results achieved by the company in live trading.
No profits are guaranteed and everyone is warning about it, but the company does make money. Whoever has not seen it may actually have an opinion as described here.
BaFin’s warnings are linked to their ignorance of the company.
There’s nothing legal about securities fraud and Ponzi schemes.
Prove it with legally required audited financial reports.
Right. Couldn’t possibly be your own ignorance of securities law.
Perhaps I shouldn’t have used the word “warning”. What BaFin has issued is an order banning Paraiba, with immediate effect, from operating in Germany, since it had been doing so illegally (“die sofortige Einstellung der unerlaubt betriebenen Anlageverwaltung angeordnet”).
There are no indications that Paraiba is operating legally anywhere else. The fundamental rules about selling securities are pretty much the same everywhere, and if Paraiba had licenses to sell securities in other jurisdictions, surely it would prominently display them on their website.
BaFin also helpfully adds the observation that no genuine investment strategy can be discerned in Paraiba’s own material (“Es ist keine konkrete Anlagestrategie erkennbar.”). IOW, they doubt Paraiba is doing any actual investing, and strongly suggest, without using that word, that it’s just another Ponzi scheme.
But it’s always entertaining seeing people peddling Ponzi schemes claiming that experts who work for financial services regulators, with lots of legal powers, are ignorant idiots whose statements can easily be dismissed.
Especially if the man heading this particular Ponzi is a former accomplice of the OneCoin criminal enterprise. Will Eric show to people who meet him how much money he made from that?
This is Erich: linkedin.com/in/erich-ely-381442144/
His adress is:
Hello admins of this page, you will soon have to remove this content.
Paraiba CEO has had enough of people writing these things without proof. Then i will laugh hard.
The proof Paraiba World is a Ponzi scheme is in its business model. No need to wait, you can start laughing now.
So, he’s taking BaFin to court, is he?
That certainly will be a first for a Ponzi operator, so it will be very interesting. By all means keep us up to date on his case, and its progress through the German courts.
You have to admit, though, it’s bloody funny.
Imagine Erich Ely or his (imaginary) lawyer standing in front of a judge and attempting to explain how the critics are wrong and Paraiba is completely legal because……………………
I kind of doubt our “Mrki” knows what BaFin even means.
Well if Paraiba isnt allowed to do any business in europe doesnt have to mean its a scam.I am logical person.You prove to me that its a scam then i will believe it until then i will keep cashing out with this company.
You saying things and you have no evidence whatsoever.
I know bafin and fma can write whatever they want in fact they have to write otherwise you can press charges against them if they dont put out a warning.
EU has stupid laws and expensive bank licences.Erich just went the other way around.
And i know for a fact that he has 7 lawyers behind him.
The reason it isn’t allowed to business is because it’s committing securities fraud.
MLM + securities fraud = Ponzi scheme.
Whether you think protecting consumers from fraud is stupid is irrelevant.
“He” could have 1000 lawyers behind him. Paraiba World is still committing securities fraud and operating illegally.
You want to ignore evidence and continue stealing from people, awesome. But don’t pretend there isn’t evidence Paraiba World is a scam.
Did you get this bit of legal nonsense from Mr. Ely personally?
(a) BaFin didn’t issue a warning, it was a ban, ordering Paraiba to cease its activities immediately.
(b) The idea that someone could sue a financial services regulator for not issuing a warning against some scammer is ludicrous.
If you’ve got the money needed to start a bank, including the money needed to pay qualified staff, the administrative fees are negligeable.
Of course, if you’re just a small-time Ponzi peddler like Erich Ely, you don’t have the kind of money to even start thinking about setting up a bank – except a fake one, to help you defraud people.
In case you hadn’t noticed: every criminal appearing in court has one or more lawyers behind him.
But PassingBy, he has SEVEN! Aren’t you quaking in your boots? I know I am, brrrrr. But that’s because it’s cold in here. I’ll reset my thermostat.
Their HK address is fake. I was there a week ago.
Well, you all missed out on a lot of profits by listening to people who don’t know what they are talking about. Paraiba has 17 lawyers ensuring compliance in multiple key jurisdictions.
They are building a world class encrypted secure communications system with Zoom style conferencing systems already in beta.
They have not missed a payment since they began.
The CEO is open and transparent but does not run an open book operation. I and others I know have seen and verified the trading.
As of this writing the company has taken on about 150 million in equity and (Ozedit: marketing spam removed, see below)
Ah, Paraiba World’s Alexa rank is tanking. Here come the shills…
As I write this Alexa ranks the US as the top source of traffic to Paraiba World’s website. Paraiba World isn’t registered with the SEC and therefore operates illegally (securities fraud).
Your made up lawyers are worth as much as your backoffice balance.
Says every Ponzi shill until said Ponzi collapses.
Just going to leave this as is.
If you want to make claims about Paraiba World’s financials, provide evidence of regulatory registration and filed audited reports.
“bUt I sAw TrAdInG!” and other Ponzi marketing bullshit on social media isn’t a substitute.
I’m a member of Paraiba and have been earning for a while. I actually take out my profits (must be a minimum of $100) and send them straight to my bank.
So far so good. I haven’t brought anyone on board with me, so I know it can be done passively. Just sayin’.
Whether you got in early and manage to steal money from those who invest after you is neither here nor there.
Ditto whether you personally recruited the Paraiba investors you’re stealing from.
The company earns it’s revenue from FOREX trading and other sources.
They don’t use the funds of one person to pay another. That’s illegal.
If you want to make representations about external funds, provide proof Paraiba has registered with financial regulators and filed legally required audited financial reports.
Running a Ponzi scheme is illegal as you pointed out. So is securities fraud.
They all say that, Jill. And they all lie, and eventually it collapses, they run off with what they manage to skim off the top, and either retire to Dubai (the new scam capital of the world) or boot up a new scam.
question, are you still in Paraiba? Is anyone still in Paraiba. I see the message was Oct 3, 2020… it is now Jan 17, 2022
I am still in Paraiba. And doing extremely well. Paraiba does a lot of business in Europe.
In fact most of its members are Europeans. The majority of people investing now are in Europe.
This article is full of misleading crap, half truths, fake news and lies.
While I have no doubt Paraiba’s early investors are European scammers, today they’re stealing from Honduras, Russia and the US (Alexa).
Which is why you failed to provide even one example, right?
Paraiba’s website traffic is on the decline again. Here comes the butthurt…
This one is done…members are reporting no withdraws since July 18th…
Aren’t they excited about losing more money to Trillant?
They mostly players in the fb group.
who will likely lose again and again…lol.
This scam is still ongoing. I know someone in it and he’s very very active recruiting people. I have heard him on the phone recruiting people a few times.
Tried to recruit me again yesterday with staggering claims about making $1000 a day sitting at home and how the company makes tens of millions a day.
Don’t be greedy and avoid. You will lose all your money.