The Kuailian Ponzi scheme has collapsed.
The company is offering affiliates three options going forward.
Kuailian announced its collapse on a September 29th “corporate call”, hosted by Communications Coordinator Fanis Anamourlis.
Kuailian founder and CEO David Ruiz de Leon (right) was nowhere to be seen.
BehindMLM reviewed Kuailian in January 2020. We found a fraudulent investment scheme pitching 320% returns, paid on investments of $100 or more in KUAI Ponzi points.
Rather than just admit Kuailian was a Ponzi scheme that ran out of money, Anamourlis blames “aggressive corrections” in the crypto market.
Anamourlis then goes on to blame Kuailian’s Spanish victims, which leads us to a class-action filed earlier this year.
In late March over 300 Kuailian victims filed suit against local promoter Javier Biosca Rodriguez, his wife Paloma Gallardo (together right) and son, Sergio Biosca.
Rodriguez allegedly had over 4000 investors in his Kuailian downline. He solicited investment into Kuailian through “Algorithms Group LTD”, a UK shell company.
In any event, Spanish Kuailian investors had been promised 20% to 25% monthly returns in 2019. By January 2020, the time of BehindMLM’s review, this had dropped to 8% to 10%.
Returns continued to decline throughout 2020, until Kuailian stopped paying returns altogether in November.
Investor losses are estimated to run into hundreds of millions of euros.
The National Court accepted the class-action, and in June Rodriguez was arrested in Malaga.
A linked complaint has been filed against Kuailian itself, which Anamourlis addresses.
[3:45] The Spanish market today is in a delicate situation.
Unfortunately we have been severely punished by false accusations, which have flooded social networks and other means of communication.
[4:04] Apparently the lawsuit in the National Court, which is only in the preliminary investigation phase, without defendants and without evidence to support the accusations, is consuming our resources – due to the large amount of information that we’re having to process, to present and defend out interests.
Anamourlis goes on to claim Kuailian has submitted “more than one hundred thousand” pages of supporting evidence to the National Court.
[5:09] Unfortunately the situation in the Spanish market is effecting the rest of the market, and this leads us to a clear conclusion:
We don’t believe that it is the time to launch any product on the market, or to take any further steps forward until we’ve won the legal process.
And therefore, the time has come to end the cycle.
“End the cycle” refers to Kuailian initiating its exit-scam.
As part of that exit-scam, Kuailian is offering victims three choices.
First, they can put in a
[7:50] liquidation request and you will receive the amount corresponding to your contribution … according to the value that it has now in the market.
“The value that it has now in the market” is key to that sentence. One victim commenting on our Kuailian review estimates they’ll take a 50% hit on the amount they invested.
Second, Kuailian victims can opt to keep their investment contract running to expiry, at which time they’ll be paid whatever it’s worth.
Anamourlis warns that with this option, returns going forward will be “much lower than the current ones”.
This option makes little sense in light of Kuailian not paying withdrawals for most of 2021, and Anamourlis stating:
[6:24] The staking model that we’ve been using since 2018 is no longer viable due to the market conditions.
Seems silly to trash your Ponzi ruse and then offer it as a way for victims to dig themselves into a deeper financial hole.
The third option is 160% of 80% a Kuailian victim’s investment, minus returns already paid out.
The catch with this option is
70% (will be paid out) in 17 equal and consecutive monthly installments, the first of which is within a month of the signing of the repurchase agreement.
And a final installment (the 18th) amounting to 30% of the final repurchase price.
Again this option makes little sense, in light of Kuailian already being unable to pay withdrawals.
With whatever percentage of victims opting for the first option further clean out what’s left, that’s even less to pay options two and three with.
Or, as I suspect will happen, Kuailian won’t pay anything out and this is just lip-service for the court.
Having seen Javier Biosca Rodriguez get arrested, I’d be very surprised if David Ruiz de Leon was still in Spain.
Ruiz de Leon’s last official Kuailian appearance was on a June 6th corporate call, on which he made excuses for Kuailian’s non-payment.
Pending a surprise arrest later down the track, I suspect we’re not going to see him again any time soon.