An obscure and controversial crypto-currency investment scheme is arousing concern in the Hispanic community, offering unusually high financial returns to mostly low-income clients, especially in Cuba.
Trust Investing is one of a number of digital investment platforms that have sprung up in recent years around the globe, seeking to cash in on the bitcoin boom sweeping the world’s financial markets.
But critics have raised questions about its business model and two countries - Spain and Panama - have issued warnings about its unregulated activities. Its country director in Cuba was also arrested last month on charges of "illicit economic activity," according to his family.
Trust Investing, which despite its name operates only in Spanish, promises profits of more than 200% in 10 months, with an initial deposit of as little as $15. Some clients in Cuba are said to have invested thousands of dollars, from homes sales.
The company website says it has 800,000 members in 80 countries, with 300,000 in Cuba, a surprising number for one of the poorest countries in the hemisphere where most people don’t have access to foreign currency.
The company uses a trust system of network marketing, popular in the informal economy, but which lacks government regulation or independent oversight. It relies on members, or ‘trusters’, who are paid according to how much they invest and how many others they recruit.
Critics warn that this model is dangerously similar to so-called pyramid, or ‘Ponzi’ schemes, which pay profits to early investors with funds from more recent investors, without a genuine money-making business activity at its core.
Despite the voices of concern, Univision is not aware of any formal complaints of fraud against Trust Investing.
But some members in Cuba have complained in recent weeks on social media chats that their accounts were blocked and they were unable to withdraw funds. The company confirmed that it blocked 87,000 accounts claiming they lacked proper compliance documentation, adding that they are in the processing of gradually being unblocked.
“This company sells thin air,” said Manuel Milanes, a Cuban economist in Miami who has compiled a detailed investigation of the company which he shared with Univision.
“Cubans are so eager to do something,” he said, noting that Cuba’s communist system has denied Cubans access to the international financial markets for decades.
TrustInvesting.com is one of the top ten most visited websites in Cuba, according to SimilarWeb, which measures web traffic. Cuba accounted for 34% of its visits, followed by Brazil, Italy, Colombia and Venezuela.
It recently began doing business in Miami in low income households lacking familiarity with financial investing.
“At first, I didn't want to invest, but a friend told me about someone who strated with $1,000 and withdrew $11,000,” said a Salvadoran house cleaner in Miami who invested $500 in February and asked that her name not be used. “She's a decent person and now she has recruited a number of people,” she added.
Like many, the woman said she didn’t have the resources to invest in a 401K or a mutual fund, and, already into her 60s she said was hoping to make some quick savings for her retirement.
From Panama to Estonia
Trust Investing was founded in 2019 by three Brazilian businessmen, at least two of whom emigrated a few years ago to Spain.
CEO Diego Chaves is from a working class background in Porto-Alegre in the south of Brazil and emigrated to Malaga, Spain aged 16 where he got his first job picking lemons for 60-70 euros a day, according to the company’s website. Marketing director Fabiano Lorite also got his start in Spain washing dishes and working as a waiter. Technology chief, Claudio Barbosa, picked oranges and cut sugar cane in his native state of Sao Paulo.
They initially registered the company in Panama, before moving to Estonia a year later, according to official documents Milanes showed to Univision.
None of them appear to have much experience in finance, and their corporate documents indicate that their activities involve "information technology and computer services," including installation of personal computers and software.
On its website, Trust Investing presents itself as “a digital currency manager ... working in conjunction with experienced traders in the financial market.” It says its goal is to “making the crypto asset market more accessible to ordinary people."
Wine, travel and music
The company has also branched out into wine, travel and music. Trust Wine says it has obtained the rights to an exclusive vineyard in Spain and offers a case of six wines for $300. Its Trust Travel purportedly enables member to buy trips with crytpo currency, while Trust Music gives recording access for digital money.
Cryptocurrency has become one of the hottest trading markets in recent years after the stunning success of bitcoin. But it has also seen it fair share of scandals.
Frauds involving bitcoin and cryptocurrencies lured at least $4.3 billion from investors in 2019, according to Chainalysis, a company that provides blockchain forensic to protect for companies and consumers.
Spanish authorities are investigating Arbistar, a crypto trading developer that shut down a popular trading tool freezing all deposits and leading to accusations it was a pyramid, or ‘Ponzi’, scheme that allegedly pocketed $120 million.
The National Securities Market Commission of Spain (CNMV) and the Superintendency of the Securities Market of the Republic of Panama (SMV) issued similar statements last year to clarify that Trust Investing “is not authorized to provide investment services” in their respective countries.
In Cuba, the activities of Trust Investing have come under close scrutiny after its country ‘team leader’, Ruslan Concepción, a 28-year-old industrial engineer. was arrested at Havana airport bound for Moscow, according to relatives.
Cuban President Miguel Díaz-Canel said earlier this month the government was looking into the cryptocurrency scheme and was seeking to protect Cubans “from being swindled”, according to the Agencia Cubana de Noticias news agency.
The Cuban Central Bank also warned about " the deceptive and unreliable nature of the alleged companies that have proliferated in the Cuban virtual scenario dedicated to brokerage services of securities and foreign currencies."
It's unclear if U.S. authorities are aware of the company’s activity. A spokesperson for the U.S. Commodity Futures Trading Commission (USCFTC), a federal agency which protects consumers from predatory business practices, said its name had not come up on its fraud ‘Red’ list.
The website of the U.S. Federal Trade Commission (FTC) warns of various ways that cyptocurrency is used to scam individuals. “Some companies promise that you can earn lots of money in a short time and achieve financial freedom,” it says. “But these are all fake promises, and false guarantees,” it adds.
Businesses involved in electronic commerce on the internet should post the company’s name, physical address, and an email or telephone number that consumers can use if they have questions or problems, according to international guidelines.
Trust Investing has none of those on its website. Univision tried without success for three weeks to locate the directors of Trust Investing, a trio of Brazilians who emigrated in Spain. While several people professing to be ‘team leaders’ in the company organization responded to messages on social media, they did reply to detailed questions.
The founders of Trust Investing have published a number of You Tube videos boasting of their financial “conquests” and like to post photos on social media wearing dark glasses and sporting diamond encrusted Bitcoin logo rings.
“We had no shortage of attacks, no shortage of people trying to smear us,” said Chaves, el director general (CEO), de Trust Investing, in a three-hour video earlier this month to celebrate the company’s two-year anniversary, which received 81,500 views.
“Our purpose in life ... is nothing more than to bring joy and opportunity into the home of every truster member who is with us today,” he added.
Several members of the company in Cuba, Mexico and Uruguay, did respond to messages and defended the company’s practices saying they received all the promised payments and dividends. In social media chats fans of the company say critics are simply jealous of its success.
They attribute the blocking of accounts to an attack by hackers.
“I have no doubts that it is a legal company,” said Arelis Gomez in Guantanamo, Cuba, who said her account was blocked for 20 days. "Our account was blocked without being able to enter until yesterday and when I was able to enter there was all my payment," she added.
Eduardo Álvarez, a 33-year-old Cuban-born systems engineer living in Oaxaca, Mexico, told Univision that he began investing 13 months ago. "It's a very, very profitable market," he said.
Altogether, Álvarez had invested a total of $ 600 with his wife and his mother, earning an average of 18-20% interest per month. He said that he had made several withdrawals between $ 100 and $ 500. "My money has always come to me in the digital wallet without problems."
Critics of the company in Cuba say its business model seeks to take advantage of the country’s lack of exposure to modern financial instruments. "There is a lot of exposure of this company's services on social media," said Michell Diaz, a Cuban economist who did his thesis in blockchain technology. Diaz said he considered investing but looked into the company first.
"As a result of a little bit of research I decided it was very likely that Trust Investing was another pyramid scheme and of course I didn't invest anything," he said. "It is virtually impossible for this company to do what it claims to do and the way it does it," he said.