Table A2. Transcript compared to the red... | Emerald Publishing

Table A2.

Transcript compared to the red flag checklist for cryptocurrency Ponzi schemes

Red flag category	No.	Identified themes (red flags)	Transcript parts (including time stamps) referring to red flags
Investment marketing	12, 25	The investment is marketed as an “exclusive” opportunity, with an increasing pool of similar investors	(5:55) “… MTI trading all right this is our trading, trading software exclusive, exclusive to MTI members only, so if you're not part of MTI you’re not going to get this …” “… the compensation plan is something that sets us apart from other companies in this (27:25) in this industry, so yes we’ve got the referral programme it’s completely optional when you refer somebody if you refer (27:32) somebody then you’re gonna get what we call a referral bonus” (43:58) “… you get a link from them; please don’t go and sign up on the corporate site; you need to get a link from the person (44:04) that referred you”
	31, 36	Advertising in the form of word-of-mouth, with statements and endorsements from unknown sources	(0:47) “… this the information shared in this presentation is not to be considered as financial advice. All right, as members of MTI myself and 160 plus thousand people that are involved, we’re not financial advisors, and we are merely sharing our personal experience of this opportunity with you” “All right now, listen (17:45) with a solid service for people to create a passive income and a referral programme was a natural (17:52) choice to market MTI” “So part of MTI’s expenses, instead (28:02) of paying huge, instead of paying huge marketing budgets and paying for a television and online marketing, we’ve (28:10) decided to rather employ a referral marketing strategy which is the most effective and cost-effective form of (28:15) advertising …”
	2, 22	Claims of little or no risk to the investor	“There’s no registration fee, no subscriptions, no administration fees (11:47) whatsoever, no packages or expiration of your Bitcoin capital …”
	4, 37	Unregistered investments in a market where there is little or no regulation for the investment type	“So the values and (3:30) service that we offer here obviously it is to grow our bitcoin portfolio. That’s the most important thing here; we want to help people grow their Bitcoin trading services bitcoin as the base currency …” “… and the accounts-based currency again is (6:40) in Bitcoin; everything that we deal with in and out is in Bitcoin, not USD (6:46); nothing like that; it’s all in bitcoin …” “We had to switch (6:21) to crypto because we just truly believe it’s a bigger market and, and it’s powerful, it’s powerful crypto …” (6:28)
	5, 16	Investment advisors lack professional licenses	(3:05) “MTI is not a financial advisory company. Okay, we don’t give financial advice; that’s not what we’re here for (3:11); you make that logical decision whether this is the vehicle for you or not …”
	13	Investment duties and fundraising are intertwined	n/a
Statements and payments	7, 30	Unconventional or inconsistent account statements that are delayed and prone to error	“Uh, when will we see info detailed report (48:55) to be active? David, I know it’s been so frustrating. … So, we needed live limited (49:12) live trading views in the back office, so that became a priority. I promise it will be done; it’s just that other things have been (49:18) more important, but it will be done, and we know that it’s important for our leaders”
	18, 42	Difficulty in tracking invested assets and liquidating investments	“I have accounts, and they still haven’t been deleted, and they have been empty (1:05:59) for months or …? We are working on those changes like they’re obviously being deleted”
	8, 28, 29	Delays and difficulties in receiving payments, with pressure to instead, reinvest earnings and forgo the pay-out	n/a
	26, 40	Pressure to maximise investment funds and customary fee waivers on the investment	“Guys, this is big; there’s no joining fees (7:35) here, there’s no administration fees, and there’s no subscription fees …” “…and then profit (8:06) listen no withdraws fees is one of the biggest things that attracted me to here in an MTI …” “… withdrawals are quick and easy, okay it’s they’re quick and easy (13:28), and there’s no withdrawal fees and no waiting periods (13:34) all right, and that’s powerful, and there’s no cancellation fees you guys …”
Company or perpetrator	11, 34	There is little or no history of the company, which one person tightly controls	“We are a company that started back in (2:38) April of 2019; our CEO and founder is Johann Steynberg from South Africa …” “I joined September (14:13) 3rd of 2019; read that slide so just myself and for those that have joined (14:18) in the month of September look it, look at the average profit that I’ve, I’ve made on top of my bitcoin and the (14:25) 40 members of profit and that was just September to June (14:31) that’s crazy numbers crazy numbers…”
	14, 35	A lack of details on company processes and procedures and resistance to outside audits	“So there really is no big deal, no pyramid schemes, nothing like that; yeah, we comply with all the (28:54) Consumer Protection Act regulations in South Africa, and it’s proven to be successful because (28:59) in the last 18 months we’ve grown to over 160 000 members with almost 16 000 Bitcoin and trade”
	32	The perpetrator appears to be charismatic and trustworthy	“… we are um (23:24) helping nature conservationists all across South Africa at the moment to conserve lions and (23:30) building closures for them, um, MTI is part of a feeding scheme (23:36) for underprivileged families here in South Africa …” (40:51) “So please don’t be mistaken MTI is not desperate for members, but we do feel a social and moral (40:56) obligation to tell as many people as we can because in the economic times that we’re finding ourselves in (41:02) we have an obligation to help people …” (1:01:17) “How can we be sure that the traders won’t disappear with the trading money? Uh, our traders obviously we know them, so (1:01:24) Johann is our CEO, he’s got a team of, a management team…” (1:01:47) “Could it happen in the future? Anything could happen. Do I foresee it happening? No, I don’t, (1:01:53) um, and obviously I have a little bit of insight, because I get to meet with Johann, and I get to meet with our management (1:01:59) team all the time, so I don’t think that’s something that is likely, but I do understand that it’s a legitimate (1:02:04) concern for people, but my personal opinion is that you don’t have to worry about that”
	19, 27, 38	The owners, executives or management are found to be living extravagant or lavish lifestyles, considering that the company is relatively new	(40:40) “I make more than enough money to retire at my age, so for me, I would never leave MTI, because that’d be silly”
Returns	1, 3, 9, 10, 20, 21	Promises of overly consistent or guaranteed positive returns that are unreasonably high or above market returns	“…we pride ourselves, consistency and transparency (3:57), transparency is probably the biggest thing that we that we can offer here in MTI…” “…you know just that’s the market we can’t predict the market (7:17), but I can tell you it’s been extremely consistent …” “…proven track record (12:26) okay like I said, I’ve been involved now for an entire year and my track record is, is absolutely (12:33) phenomenal here at MTI …” “(15:06) Now, a lot of people have told me, my gosh, you guys win every single day we do, but this was our very first (15:14) negative day, and it’s so important to show this slide because we do have days that are that (15:21) are bad all right and this was our very first negative day it was July 7th of 2020 which was not too long ago…”
Returns	23, 33	The returns are unrealistic or unproven and could be generated over a short-time period	“…average daily profit is (14:37) 0.49%, that is phenomenal. That tells me sustainability (14:42) that tells me longevity…” “All right, um, and there’s no earning limits on (39:26) trades; you guys you can earn whatever is the trading volume for that day you can invest in Bitcoin as much as you’d (39:32) like into your trading pool account …”
Investment strategy	6, 15, 17, 24	A special or proprietary investment strategy that is vague or lacks transparency, a secret or complex	“…MTI will continue to trade for those (38:34) 160 000 odd people; we’ll continue to have massive amounts of Bitcoin in our trading pool, and it’s not going to make a difference (38:39) to the trades that were affected with our artificial intelligence but every single day” “Our sustainability is our product our golden goose is the MTI trading bot (40:22); that’s what’s important, not new members …” “So our back office, our (49:44) websites remember none of those actually handle any Bitcoin, it’s one of the other reasons why we’ve kept our broker (49:50) private, but, um, yeah, security keys, security codes, we own those, and we make sure our Bitcoin is in cold (49:56) storage, and that’s probably the safest way that you can store Bitcoin in the world at the moment”
Investment strategy	39, 41	Investments in complex or difficult-to-understand transactions, which appear overly aggressive and where the investment success depends on an individual’s expertise	“…every single Saturday there’s no flashing of volume which means every single Saturday your numbers (35:04) don’t go to zero, in fact, they still use the trading volume from the week before to generate new trades the following week, so volume (35:11) just continues to grow” “(1:06:58) Weekend trading will only commence once we are happy with the bots performance over weekend markets”

Red flag category	No.	Identified themes (red flags)	Transcript parts (including time stamps) referring to red flags
Investment marketing	12, 25	The investment is marketed as an “exclusive” opportunity, with an increasing pool of similar investors	(5:55) “… MTI trading all right this is our trading, trading software exclusive, exclusive to MTI members only, so if you're not part of MTI you’re not going to get this …”“… the compensation plan is something that sets us apart from other companies in this (27:25) in this industry, so yes we’ve got the referral programme it’s completely optional when you refer somebody if you refer (27:32) somebody then you’re gonna get what we call a referral bonus”(43:58) “… you get a link from them; please don’t go and sign up on the corporate site; you need to get a link from the person (44:04) that referred you”
	31, 36	Advertising in the form of word-of-mouth, with statements and endorsements from unknown sources	(0:47) “… this the information shared in this presentation is not to be considered as financial advice. All right, as members of MTI myself and 160 plus thousand people that are involved, we’re not financial advisors, and we are merely sharing our personal experience of this opportunity with you”“All right now, listen (17:45) with a solid service for people to create a passive income and a referral programme was a natural (17:52) choice to market MTI”“So part of MTI’s expenses, instead (28:02) of paying huge, instead of paying huge marketing budgets and paying for a television and online marketing, we’ve (28:10) decided to rather employ a referral marketing strategy which is the most effective and cost-effective form of (28:15) advertising …”
	2, 22	Claims of little or no risk to the investor	“There’s no registration fee, no subscriptions, no administration fees (11:47) whatsoever, no packages or expiration of your Bitcoin capital …”
	4, 37	Unregistered investments in a market where there is little or no regulation for the investment type	“So the values and (3:30) service that we offer here obviously it is to grow our bitcoin portfolio. That’s the most important thing here; we want to help people grow their Bitcoin trading services bitcoin as the base currency …”“… and the accounts-based currency again is (6:40) in Bitcoin; everything that we deal with in and out is in Bitcoin, not USD (6:46); nothing like that; it’s all in bitcoin …”“We had to switch (6:21) to crypto because we just truly believe it’s a bigger market and, and it’s powerful, it’s powerful crypto …” (6:28)
	5, 16	Investment advisors lack professional licenses	(3:05) “MTI is not a financial advisory company. Okay, we don’t give financial advice; that’s not what we’re here for (3:11); you make that logical decision whether this is the vehicle for you or not …”
	13	Investment duties and fundraising are intertwined	n/a
Statements and payments	7, 30	Unconventional or inconsistent account statements that are delayed and prone to error	“Uh, when will we see info detailed report (48:55) to be active? David, I know it’s been so frustrating. … So, we needed live limited (49:12) live trading views in the back office, so that became a priority. I promise it will be done; it’s just that other things have been (49:18) more important, but it will be done, and we know that it’s important for our leaders”
	18, 42	Difficulty in tracking invested assets and liquidating investments	“I have accounts, and they still haven’t been deleted, and they have been empty (1:05:59) for months or …? We are working on those changes like they’re obviously being deleted”
	8, 28, 29	Delays and difficulties in receiving payments, with pressure to instead, reinvest earnings and forgo the pay-out	n/a
	26, 40	Pressure to maximise investment funds and customary fee waivers on the investment	“Guys, this is big; there’s no joining fees (7:35) here, there’s no administration fees, and there’s no subscription fees …”“…and then profit (8:06) listen no withdraws fees is one of the biggest things that attracted me to here in an MTI …”“… withdrawals are quick and easy, okay it’s they’re quick and easy (13:28), and there’s no withdrawal fees and no waiting periods (13:34) all right, and that’s powerful, and there’s no cancellation fees you guys …”
Company or perpetrator	11, 34	There is little or no history of the company, which one person tightly controls	“We are a company that started back in (2:38) April of 2019; our CEO and founder is Johann Steynberg from South Africa …”“I joined September (14:13) 3rd of 2019; read that slide so just myself and for those that have joined (14:18) in the month of September look it, look at the average profit that I’ve, I’ve made on top of my bitcoin and the (14:25) 40 members of profit and that was just September to June (14:31) that’s crazy numbers crazy numbers…”
	14, 35	A lack of details on company processes and procedures and resistance to outside audits	“So there really is no big deal, no pyramid schemes, nothing like that; yeah, we comply with all the (28:54) Consumer Protection Act regulations in South Africa, and it’s proven to be successful because (28:59) in the last 18 months we’ve grown to over 160 000 members with almost 16 000 Bitcoin and trade”
	32	The perpetrator appears to be charismatic and trustworthy	“… we are um (23:24) helping nature conservationists all across South Africa at the moment to conserve lions and (23:30) building closures for them, um, MTI is part of a feeding scheme (23:36) for underprivileged families here in South Africa …”(40:51) “So please don’t be mistaken MTI is not desperate for members, but we do feel a social and moral (40:56) obligation to tell as many people as we can because in the economic times that we’re finding ourselves in (41:02) we have an obligation to help people …”(1:01:17) “How can we be sure that the traders won’t disappear with the trading money? Uh, our traders obviously we know them, so (1:01:24) Johann is our CEO, he’s got a team of, a management team…” (1:01:47) “Could it happen in the future? Anything could happen. Do I foresee it happening? No, I don’t, (1:01:53) um, and obviously I have a little bit of insight, because I get to meet with Johann, and I get to meet with our management (1:01:59) team all the time, so I don’t think that’s something that is likely, but I do understand that it’s a legitimate (1:02:04) concern for people, but my personal opinion is that you don’t have to worry about that”
	19, 27, 38	The owners, executives or management are found to be living extravagant or lavish lifestyles, considering that the company is relatively new	(40:40) “I make more than enough money to retire at my age, so for me, I would never leave MTI, because that’d be silly”
Returns	1, 3, 9, 10, 20, 21	Promises of overly consistent or guaranteed positive returns that are unreasonably high or above market returns	“…we pride ourselves, consistency and transparency (3:57), transparency is probably the biggest thing that we that we can offer here in MTI…”“…you know just that’s the market we can’t predict the market (7:17), but I can tell you it’s been extremely consistent …”“…proven track record (12:26) okay like I said, I’ve been involved now for an entire year and my track record is, is absolutely (12:33) phenomenal here at MTI …”“(15:06) Now, a lot of people have told me, my gosh, you guys win every single day we do, but this was our very first (15:14) negative day, and it’s so important to show this slide because we do have days that are that (15:21) are bad all right and this was our very first negative day it was July 7th of 2020 which was not too long ago…”
Returns	23, 33	The returns are unrealistic or unproven and could be generated over a short-time period	“…average daily profit is (14:37) 0.49%, that is phenomenal. That tells me sustainability (14:42) that tells me longevity…”“All right, um, and there’s no earning limits on (39:26) trades; you guys you can earn whatever is the trading volume for that day you can invest in Bitcoin as much as you’d (39:32) like into your trading pool account …”
Investment strategy	6, 15, 17, 24	A special or proprietary investment strategy that is vague or lacks transparency, a secret or complex	“…MTI will continue to trade for those (38:34) 160 000 odd people; we’ll continue to have massive amounts of Bitcoin in our trading pool, and it’s not going to make a difference (38:39) to the trades that were affected with our artificial intelligence but every single day”“Our sustainability is our product our golden goose is the MTI trading bot (40:22); that’s what’s important, not new members …”“So our back office, our (49:44) websites remember none of those actually handle any Bitcoin, it’s one of the other reasons why we’ve kept our broker (49:50) private, but, um, yeah, security keys, security codes, we own those, and we make sure our Bitcoin is in cold (49:56) storage, and that’s probably the safest way that you can store Bitcoin in the world at the moment”
Investment strategy	39, 41	Investments in complex or difficult-to-understand transactions, which appear overly aggressive and where the investment success depends on an individual’s expertise	“…every single Saturday there’s no flashing of volume which means every single Saturday your numbers (35:04) don’t go to zero, in fact, they still use the trading volume from the week before to generate new trades the following week, so volume (35:11) just continues to grow”“(1:06:58) Weekend trading will only commence once we are happy with the bots performance over weekend markets”

Source: Author’s synthesis