So I saw a post on facebook by a friend of mine about an network marketing program (MLM) called Skyway. As I always do when I first learn of an MLM program in crypospace I researched it. I am not one who just defaults into the view that all MLMs are scams.
I found an article on BehindMLM titled Skyway Capital continues investment fraud with tokens & CryptoUnits and I shared the link in a comment on this persons post. As expected I got a huge backlash about not having done my research and not knowing what I was talking about.
Of course I did know what I was talking about, but a couple of people on the post insisted I didn't because according to them SWIG (skyway investment Group) and the cryptocurrency are separate entities and not a scam.
This is common for scams to do. They rename, break their company into multiple shell companies and attempt to claim because they are separate companies they are now legit.
So I decided to do more digging. First I went to the website for cryptounits. They had a real time support system setup so I used it to ask questions.
Just to make this perfectly clear I asked them to view the source of their blockchain and/or smart contract and they told me no such blockchain or smart contract exists. Further they told me they are not having an ICO at all.
This means according to them, they are not raising funds for the development of a blockchain or smart contract - as that is what an ICO actually is. Its a sale of tokens or coins that sometimes don't yet exist, to help with the future development.
I went back to the facebook post at this point and asked the people conversing with me "since there is no ICO or STO taking place what is it the Skyway sells".
The first reply was from a guy telling me "See you haven't done your research. They are having an ICO." This is funny because it shows first hand that this person has no idea what they actually invested in. If they understood, they would realize according to the cryptocurrency side of company they are not having an ICO.
So I sent the screenshot from the company, proving I had in fact done my research. After sharing the photo, another person tried to chime in and tell me all the hings they sell.
I wish I could give an exact quote but it appears the post has sense been removed. The reply was something to the effect of "they sell services to local and national governments and financial information." (keep in mind I don't have the exact quotes so I am trying my best from memory).
At this point my work was effectively done for me - because I had heard everything I needed to know.
The conversation however didn't end here. There was back and forth banter about I should research the owner of the program because he is well known and very respected and has tons of inventions he has created and all sorts of various things.
However I don't need to research a person to see a scam.
How legit MLMs work
In a legitimate MLM, there is a separation from joining and from selling. If we look at companies like discovery toys or pamper chef we can see how a legitimate MLM works. On one end is the MLM program which you join, purchase a kit, and can sell to others. This kit contains products that allow you to host parties or show off what is for sale. On the other end, sales take place to the public at large.
This means there is a huge separation from whats being sold to the public and whats being sold to the members of the program. It means the public at large can simply come and purchase products without having to join the program.
In the world of MLM this separation MUST take place. Without this separation there becomes a blurred line as to whether someone is joining from referring new people into a program or whether they are generating legitimate sales.
If they are merely making money from referring new people into the program it becomes a ponzi scam. This is because the money from referring new members is being used to pay existing members which is a big legal issue.
In fact several years ago there was a company called zeek rewards that had this very problem. The people joining the program were making money referring more people into the program and very few sales were taking place. When the program was busted for being a scam and taken to court as a $850 million dollar scam, it was their book keeping that was most damaging as it showed the profits of the company were not coming from any sales, but from new members into the scam.
Why skyway is a scam
Skyway is a scam for this very same reason. Despite the argument used in the facebook conversation I had, the fact is no services are for sale to the public at large. In fact if you visit their SWIG website you will find all of their products are "in development" meaning nothing exists that is for sale yet.
This means the program entirely operates on what is "supposedly" coming in the future. However as can been seen from the copyright on the page, they have been claiming this since 2015.
This means it is nothing more than a giant ponzi scam. It takes money from investors, and uses that money to distribute to newer investors. The cryptocurrency side of things does not exist.
There are no tokens. There are no smart contracts. There is only a program that is preying on naive people desperate to make money.
If you are interested in earning with any sort of MLM whether it is in crypto space or not investigating is very easy.
First in crypto space ensure a coin or token legitimately exists. If not there is a serious problem as an MLM should not exist before the currency or token itself exists.
Next find out whether the program has separated joining the program from the actual sale of the products.
Finally, find out if there are sales taking place that justify the earnings. If there are no sales of products taking place to people not part of the program, it is absolutely a scam.