The recent warning from the Malta Financial Services Authority about the illegal cryptocurrency operation QuickX is related to a Ponzi scheme in which former EU commissioner John Dalli was involved in no small way.
The MFSA told the public to tread carefully because “the entity may be a dubious scheme with the risk of losing money”. It does not mention Dalli.
But The Shift has been working on the story for months. A question was sent to the MFSA in January 2021, but the only answer received was that the Authority is reviewing the case.
More than a year later, the MFSA has issued a warning that it has gone too far, and some people have suffered because of the regulator’s lack of action.
Research carried out by The Shift shows that this is not only a “dubious scheme”, but also has all the characteristics of an illegal Ponzi scheme, a form of fraud that involves paying ‘profits’ to previous investors with funds from newer ones. investors until the scheme implodes.
John Dally had been embroiled in a previous Ponzi scheme and now faces bribery charges.
How to start – a strange press conference in India
In May 2018, news of India’s regional news about several cryptocurrency projects raised eyebrows more than 5,000 kilometers away – in Malta.
The subject was a press conference in New Delhi organized by the Adhlakha brothers (Vaibhav and Kshitij) from India, who founded QuickX.
Brother Adhlakha who sports a strange mustache excitedly announces to the world that John Dalli is the latest recruit to the crypto project’s “advisory board”.
Whether it was the former EU Commissioner’s disgraceful speech about how cryptocurrencies will allow people to transfer money without being “spyed upon” by law enforcement or the feeling that he should remove the checked CV pieces, the press conference left the Maltese audience (and the press) with what they could only described as a distinct sense of foreboding.
It turns out that this feeling is somewhat accurate, although no media outlet in Malta has connected the dots between QuickX and John Dalli, despite reporting on the conference on the subject it dealt with.
The MFSA, in a warning issued last month on October 25 that did not mention Dalli by name, advised, “The public should refrain from doing business or transactions with the entities mentioned above.”
Shift Research shows that Dalli is not only an ‘advisory board member’, but the Maltese company behind QuickX and CNexchange-related companies are also hosted at Dalli’s business address in Portomaso in St Julian’s.
It is fully owned by Indian brothers Vaibhav Adhlakha and Kshitij Adhlakha, while Dalli, apart from using the address, does not appear in the document.
No annual accounts or returns have been filed by the company, or any other documents for that matter, since its incorporation on July 5, 2018.
At that time, in 2018, before the Initial Coin Offering (ICO) of the Indian startup cryptocurrency company, the Indian promoters boasted a lot about having secured the “support” of Dalli and about how the former finance minister of Malta and the European Commissioner were its members. advisory board.
‘Unequal access to government regulators’
Dalli’s presence on QuickX’s advisory board, according to the company, “…
Company said“At this point you will be hard-pressed to find a token sale that has been green-lit by an establishment player. This is what makes the QuickX token sale [ICO] very unique, because it has been supported by the former finance minister of Malta John Dalli.
‘Sir John Dalli’, as he was branded by his Indian partner at the time, said at the QuickX event: “Blockchain is a technology that transcends technical issues. The core rationale is to send information directly between people involved, pass centralized data, and capture and store servers controlled by governments and big businesses.The result is user recovery.
Dalli also appears to have brokered meetings in Malta, including between the Adhlakha brothers and Mario Borg, then a member of OPM’s “blockchain advisory team” and a member of the MFSA’s Board of Governors, to explain the QuickX project and understand Malta’s new “Blockchain Island”. “district law
It’s not clear what was discussed during the meeting, but QuickX promoters were certainly pleased with what they heard. A few weeks later, the “QuickX project” became a project owned by a Maltese company, QuickX Ltd.
Six months later, a Maltese company would violate the law (listed on a crypto exchange without MFSA approval) and repeat the violation, including running an unlicensed crypto-exchange (CNexchange) from Malta.
QuickX Ltd. nor has it filed any accounts or annual returns since its incorporation in 2018, a status that should have led to it being declared ‘inactive’ by the Malta Business Registry (MBR) and shut down.
But breaking Malta’s regulations and company laws, may just be the cherry on top.
Research conducted by The Shift to QuickX and related companies such as CryptoAdvice and CNexchange and, more recently Eazme and Riseoo, shows signs of a Ponzi scheme, where investors are invited to lend tokens to related entities in exchange for an impossible return that never materializes.
In addition, investors are rewarded for persuading other investors to buy QuickX and lend their tokens to CryptoAdvice. Any earnings paid to investors will be paid in worthless tokens (QuickX) or using other investors’ money.
CryptoAdvice has since imploded, leaving investors dry, but the same “token debt” arrangement will later be re-opened and re-branded as CNexchange and “virtual minting” contracts, again offering unsustainable ‘risk-free’ returns of up to 6% per month or 25% per month year, as long as you lock in your investment and recruit others.
Shift Research shows that the promoters behind QuickX, CryptoAdvice and CNexchange have, most recently, relaunched and rebranded the scams as Eazme and Riseoo.
Investors in QuickX and related ventures, according to careful estimates by The Shift, lost millions of US dollars.
Some of the investors who suffered in the scheme associated with QuickX consulted by The Shift said they are calling for legal action against the parties involved in this fraud.
Previous efforts – GenArb
QuickX and CryptoAdvice are not John Dalli’s first ventures in India.
A year before the launch, in March 2017, a company called “Genius Capital Markets Ltd” (GenArb) was registered in the most unexpected place, Vanuatu.
It is not clear who made this attempt, but the video is online event in Singapore shows John Dalli promoting the effort as the brainchild of his contacts.
Mainly targeting the Indian subcontinent, GenArb promises uninformed investors a so-called ‘Investment Pool’ guaranteed stratospheric returns starting from an income of 5% every ten days, if the investor allows the money to be locked in the pool for 390 days.
As if the sustainability of GenArb’s returns wasn’t enough of a red flag, GenArb promises an “increase” in returns from 5% to 7% every ten days if investors, then attract three more investors.
Marketing events were held in Delhi, Singapore and Indonesia in the summer of 2017, including an appearance by John Dalli and a certificate award for the most gifted salespeople signed by John Dalli and Maqsood Alam, who Dalli described as a long-time contact.
Of course, the event attracted many people involved in the Indian Multi-level Marketing space such as Dr. Mansingh Nayak (pictured below in pink).
Then all was silent.
The website goes offline leaving little more than sporadic complaints by defrauded investors on consumer websites about how after investing in August 2017, the company stopped responding to calls.
It is not clear what caused the founders of GenArb to disappear in August 2017, but many of those involved in the scam, including the entire text of the website, will resurface with QuickX and CryptoAdvice.
Like John Dalli.