Cryptocurrency scheme promoter issued stop now letter by NZ regulator

A cryptocurrency multi-level marketing scheme is under investigation by the Commerce Commission. Photo / file

A woman has been asked to stop promoting a cryptocurrency multi-level marketing scheme which the Commerce Commission believes is likely to be a pyramid selling scheme.

The commission has issued a stop now letter to Shelly Cullen - the promoter of Lion's Share - a scheme which encourages people to pay hundreds of dollars to join up in the hopes of being rewarded in cryptocurrencies from each new person they sign-up.

It wants Cullen to cease her association with the scheme or any other pyramid scheme, stop promoting and recruiting participants into it and remove any content from social media that promotes such schemes.

The commission said in a statement that on receiving the stop now letter Cullen had confirmed to it that she had stopped promoting the scheme which it is still investigating.

Pyramid selling schemes are illegal under the Fair Trading Act.

They offer a financial return based on payments made by new recruits and the return is primarily dependent on the continued recruitment of new members, not sales of a product or service.

The commission said any individuals already involved in Lion's Share should cease their involvement and those considering joining it should not do so.

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"Preventing harm from pyramid schemes is a current priority for the Commission. The schemes require constant recruitment of new members to buy in and inevitably people lose out financially as recruitment dries up."

In November RNZ reported that Cullen had held seminars online and in person stating Lion's Share gives people an opportunity to earn extra money.

In one video on YouTube, she claimed she made $154,000 from Lion's Share in less than two weeks.

She included a disclaimer where she warned people that Lion's Share was a risk and there was no guarantee they would profit from the scheme.

However, she followed that by saying "risk is the new safe".