Freebay is not just another scheme meant to rid people of their financial value. It is a reincarnated and more complex version of some failed Ponzi schemes. It probably took a more concentrated effort on the part of its owner. Its disguise is perfect, its structure is complex, and it beats most of the criteria Ponzi schemes are judged by.
Freebay’s ownership is relatively clear but there is still a bit of secrecy to it. Freebay happens to be an attempt at some sort of marketing rebirth of Karatbars International which is owned by Harald Seiz. But Seiz chooses to present Freebay as a partnership when it is, in fact, Karatbars 2.0.
It is should be noted that Karatbars International started off as a simple Pyramid scheme but jumped on the cryptocurrency bandwagon and was rebooted as an investment opportunity with the launch of KaratBankCoin( KBC) and KaratGoldCoin(KGC). KBC and KGC failed woefully. As such, Karatbars International needed another shot at a marketing reboot — Freebay.
One thing that Freebay has in common with other Ponzi schemes is that, apart from its affiliate membership, there is nothing to really invest in. No underlying assets, no business, no product or service is being invested in. Without new investors, Freebay would crash.
Of all of its features, it is Freebay’s structure that is most notable. It combines both the conventional pyramid structure, the unilevel structure and the binary compensation structure. Perhaps Seiz and his cohorts thought that a unique and complex structure would add some credibility to Freebay.
Freebay uses the binary compensation plan to pay residual commissions. This plan places an affiliate at the top of a binary team split into two sides. Each subsequent level houses twice has many positions as the previous level.
Also, Freebay pays Generation bonuses to high ranked affiliates. It does this through its unilevel compensation structure. This structure places an affiliate at the top of a unilevel team. Every personally recruited affiliate is placed under the recruiter down an infinite number of levels.
It is still clear, however, that both the binary and the unilevel payment structures are subsets of the pyramid structure that Ponzi schemes are plotted on. The pyramid structure is quite feeble because members are recruited via the promise of payments for enrolling others into the scheme. The pyramid business model is also a coded model as it helps early adopters make more money from the investments of new affiliates. The pyramid structure is preferred by Ponzi schemes because it helps in the shuffling of funds thereby creating an illusion of earnings.
Unlike most Ponzi schemes, Freebay’s ROI are quite reasonable though the “guaranteed returns” factor raises a red flag. Freebay has completely squashed the volatility factor.
As if the failure of KBC and KGC is not enough, Freebay affiliates sign up and invest in V999 tokens. Commissions are then paid to affiliates on V999 token investment. Through the V999 token, Karatbars is committing securities fraud again by offering passive investment opportunity. This signals a return to karatbars Ponzi scheme roots.
The end is near for Freebay. Its pyramid side is not sustainable and V999 is just a part of Karatbars’ never give up story. Soon, the majority of investors in Freebay would realise that nothing was actually “free”.