Many people who have joined and left the scheme have also spoken out, saying they felt scammed and manipulated into recruiting other people to join.
A British 19-year-old told RNZ she lost $2000 after joining IM at the beginning of the year.
Hamilton-born, now US-based, Rhaiah Spooner-Knight became involved with Forex about a year ago after a friend introduced her to the online platform IM Academy.
Through social media, Spooner-Knight said she had helped recruit more than 1200 people into the academy, about 500 of whom were from New Zealand.
"I've got people [who] are single-mothers, we have the [Pacific Island] community, the Māori Community, that's probably our biggest assortment of the groups, purely because a lot of them are trying hard to find another way, a lot of them have financial hardships, getting jobs.
"When they see people like me, who look like them, it's trusted and they feel like if she can do it, I can do it also."
Spooner-Knight said IM Academy cost US$199 to join, and people pay a monthly fee of US$174.
For that, people receive access to the video training courses and IM Academy's educators, who analyse the market and give people trade ideas.
But the fees can be waived, and members could even generate an income, by signing up others, she said.
At the time of speaking, Spooner-Knight said she made US$5000 per month from IM Academy - but most of that now was generated from recruiting.
Financial disclosures the company provides in the US state 85 per cent of its members made less than $US1500 per year from recruitment. At the very top, it says, 0.05 per cent of members made more than $500,000 a year.
'Manipulation tactics'
Aisha Sow from the United Kingdom told RNZ she lost $2000 after being recruited into an IM social media trading club at the beginning of the year.
The 19-year-old said one of the features of the team was that they would host hour-long Zoom calls five to six times a day.
"They'd say things like 'you have this life-changing opportunity, go and share it with as many people as you can'."
She said more senior members would prey on people's financial insecurities.
"They know obviously people who are with IM, they join because they're in desperate situations, they desperately want money, especially because of Covid-19."
Sow said was also told it was "selfish" if she did not try and sign up others.
"I feel like it was a lot of manipulation tactics."
Sow said many of the courses offered by IM were basic and there were similar, and in most cases, more in-depth resources that could be found on YouTube for free.
After a while, Sow decided to quit.
"My mentor was being very pushy with recruiting ... and I just kind of felt like they were just using you so they can rank up.
"I also calculated how much I made and how much I lost, including like all the memberships, and I lost about $2000."
Red flags
UK, US, French and Belgian regulators have all issued warnings against IM Academy's predecessor, IM Markets Live, many saying the company was not authorised to offer financial services.
The US Commodities Futures Trading Commission fined the company US$150,000 in 2018 for illegally offering Forex and binary options to retail investors.
Soon after, the company rebranded to IM Academy.
The Belgian financial watchdog went as far to say that it had "features characteristic of a pyramid scheme."
Spooner-Knight rejects this assertion, saying that unlike pyramid schemes, IM Academy had a product - the training courses - and she said the recruitment side of the business was optional.
However, it is clear the recruitment model has diminishing returns that makes it harder for people who join later to find new recruits.
For example, one person needs to recruit three others to IM Academy to start earning a residual income. Those new members would have to sign up three more people to earn the same, and so the process continues.
By the 14th round of recruiting, the 4.8 million newest members would have to find and sign up more than 14 million people to make money.
Consumer warnings
Consumer New Zealand chief executive Jon Duffy said he questioned the value of the products being offered, because it appeared that similar courses could be found online for free.
"Schemes like this typically employ multi-level marketing tactics to use people's connections to make a sale.
"That's typically because the product itself doesn't stand on its own merits."
He was also concerned about IM Academy's educators.
"The scheme itself appears to be classifying these mentors as experts, they're not necessarily registered financial advisers, so they don't necessarily have the skills someone who is licensed as a professional would have."
He encouraged anyone with concerns to contact the Commerce Commission.
The Commerce Commission, which can investigate pyramid schemes, said it was not familiar with IM Academy, nor could it comment on its conduct because no one had laid a complaint.
The Financial Markets Authority's website regards Forex trading for profit as "very risky" because changes in exchange rates are often influenced by unexpected events which often catch out experienced traders using specialist tools.
"If you do choose to trade Forex, you will need plenty of spare money to cover losses caused when exchange rates move against you," it said.
IM Academy has been approached for comment.
