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, 2022.
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 2022 – 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’s Products.
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.
Recruitment Commissions.
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.
Residual Commissions.
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.
Pool Share.
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.
Joining Paraiba.
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.
Conclusion.
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.
Related Posts:
- Feb 6th, 2022 - Apr 19th, 2022 - Sep 21st, 2022 - Jul 1st, 2022 - Aug 18th, 2022.
26 Comments on “Paraiba Review: Fake bank daily ROI crypto trading Ponzi”
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.
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 2022, 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 2022. 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, 2022, 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 2022, 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):
Rolf says: June 12, 2022, 14:00 If the gentleman is Erich Ely [he isn’t mentioned by name in the article] I am extremely suspicious, because as our sponsor in Onecoin he also didn’t advise us correctly. Alexander Brodsinskij says: June 14, 2022, 19:13 Hello Rolf, Yes, it is indeed Erich Ely, from somewhere in the southern German region [IOW, it could be Switzerland or Austria]. I hadn’t encountered the name before, but when you have had an unpleasant experience with him in the past, then of course one carries a personal “brand”. Greetings, Alex.
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.