Beware of Uulala: Review

Uulala is a multilevel marketing company focused on cryptocurrencies. 

Oscar Garcia, a California native, is Uulala’s CEO.

Oscar Garcia | Family Office Insights

Per Garcia’s LinkedIn page: 

“Mr. Garcia has spent the last two decades as an entrepreneur building enterprises and accelerating the growth of small firms. Mr. Garcia has more than two decades of experience in technology and web development.” 

Garcia served as Executive Vice President of the Lucrazon Global Ponzi scam from 2014 to 2015. 

Garcia was a Melaleuca affiliate before joining Lucrazon Global. 

Garcia was listed as a defendant in a lawsuit brought by Melaleuca in January 2014. 

“Melaleuca alleges in a lawsuit filed last week in United States District Court in Pocatello that one of its former “marketing executives,” Oscar Garcia, who is now a vice president with Lucrazon Global, a network marketing e-commerce company based in Irvine, Calif., is pitching his new business to current and former Melaleuca marketing executives. Lucrazon intends to bolster the ranks of its brand partners by poaching marketing executives from Melaleuca,” the lawsuit states. 

Garcia reached an agreement with Melaleuca in October 2016. A judgment of $5000 was imposed against him. 

Lucrazon Global ceased operations in 2014. Lucrazon Global targeted elderly victims and defrauded them of millions, as revealed in a civil lawsuit filed in 2016. 

Garcia rebuilt himself as a crypto bro following the demise of Lucrazon Global. This takes us to the founding of Uulala in 2017. 

Uualala’s first business strategy revolved around UULA and EUULA tokens. 

The company’s initial coin offering garnered over $9 million. 

The SEC filed a legal complaint against Uulala, Garcia, and co-founder Matthew Loughran in August 2021: 

“Between December 2017 and January 2019, Uulala sold UULA tokens that were purportedly intended to be used to record transactions on a financial application (“app”) that Uulala was creating and advertising to individuals without access to traditional banking services. Uulala, Garcia, and Loughran made materially false and misleading claims to investors throughout their sale of UULA concerning their app’s “patent pending” technology and a proprietary system for assigning credit ratings to app users.” 

Uulala, Garcia, and Loughran reached an agreement to dismiss the litigation. They each paid $300,000,$192,768, and $50,000 in civil penalties. 

If you’re wondering why the sums are so tiny in comparison to Ualala’s claim of $9 million raised:

“The ICO cash was reinvested in the firm to continue to improve our technology, pay our staff, cover our operational expenditures, and assist us to survive the first three years of our business.” 

There is no mention of Matthew Loughran On Uulala’s website. According to the SEC’s complaint, Loughran resigned as Uulala’s Chief Marketing Officer soon before the lawsuit was filed. 

It’s unknown whether Loughran is still associated with Uulala. 

Although its first UULA and EUULA token schemes were “dismantled,” Uulala is still active as an MLM firm. 

Stay tuned for an in-depth analysis of Uulala’s MLM potential. 

Uulala’s Products

Uulala promotes a financing alternative platform called Batched. 

Oscar Garcia said the Batched platform may “transform every firm into their digital bank.” 

Batched is designed to be marketed to third-party businesses searching for a less expensive payment processing solution. 

Uulala promises to charge far less than regular banks. Companies can also determine their charge rates and benefit from them rather than paying fees to banks. 

Uulala prices range from $5000 to $150,000. 

  • Plan 01 – $5000, followed by $500 per month for up to 100 users;
  • Plan 02 – $25,000, followed by $3000 each month for up to 5000 users; 
  • Plan 03 – $50,000 up front, followed by $5000 each month for up to 5000 users; 
  • Plan 04 – $150,000, followed by $5000 each month for up to 10,000 users. 

Along with user constraints, Uulala offers extra services to businesses that pay a higher charge. 

Uulala’s Compensation Strategy 

Along with user constraints, Uulala offers extra services to businesses that pay a higher charge. 

A “validation node” investment plan is attached to this. 

Referral Commissions

Uulala’s affiliates earn a 5% transaction fee override on any firms they individually refer to the Batched platform. 

Investment Scheme

Uulala represents transaction validation and is a crucial component of Batched. 

Rather than simply confirming transactions in the background, Uulala has turned it into the focal point of an investment program. 

Affiliates sign up and make an $1100 investment in a validation node slot. 

A Uulala associate with a validation node position can log in and click a button. 

This results in an undetermined number of “digital points.” 

Digital points are parked with Uulala with the promise of a return. 

Uulala controls the redemption of digital points in an arbitrary manner. 

According to the firm, digital points are related to transactions on the Batched platform. 

On validation node investment, referral commissions are possible, which are paid down two tiers of recruiting (uni-level): 

  • 30% on level 1 (personally recruited affiliates);
  • 10% on level 2.

Joining Uulala

Joining Uulala Affiliate membership in Uulala is contingent upon purchasing an $1100 validation node slot. 

Per Uulala’s marketing materials, the minimum investment amount will grow with every 500 seats purchased. 

Final Thoughts

Lucrazon Global’s marketing ploy was to position itself as an alternative financing platform. 

Affiliates spent between $1,000 and $15,000 and allegedly earned a passive return by using the company’s platform. 

Lucrazon Global was, in fact, a Ponzi scam that recycled invested monies to pay returns to affiliate investors. 

Uulala operates similarly but uses bitcoin and “digital points.” 

The initial idea was most likely to employ UULA and EUULA tokens; however, the SEC halted that. 

Still, whether UULA, EULLA, or digital points are employed, Uulala’s validation node investment plan is a securities offering. 

Oscar Garcia claims that validation node locations are worth $5000. 

Garcia says that validation node placements are “very valuable.” 

He represents Uulala affiliate investors who will profitably sell their interests in the future. 

Uulala’s requirement that affiliates login in and click a button to collect digital points is analogous to Zeek Rewards’ need that affiliates log in each day to submit advertising URLs. 

“We may earn these daily points by signing in, clicking the start button, and assisting with the validation of these transactions. They validate the transactions and receive a share of the proceeds.” 

It’s busy work that has nothing to do with generating profits. 

Even if it did, hitting a button is utterly passive — whether something happens or not, the “work” is being done passively through Uulala’s algorithms. 

As a result, the parameters of an investment contract are met. 

Uulala affiliates contribute $1100 (or more) in the hope of earning a passive return from the work of others. 

Using Uulala to store digital points and wait for them to be “spent” is merely a way of controlling the withdrawal rate. 

If new investment dwindles, Uulala may restrict or eliminate the use of digital points. 

Undoubtedly, Uulala will refer to their Batched platform and say that genuine transactions are occurring and that everything is legal. 

The issue is that Uulala’s validation node design retains the characteristics of an investment contract. As a result, Uulala’s MLM opportunity qualifies as a security offering. 

US securities firms must register with the SEC and produce audited financial reports every quarter. 

These reports are the sole method for customers to verify that Uulala is earning sufficient external money to cover the cost of digital point returns. 

Perhaps unsurprisingly, neither Uulala nor Oscar Garcia (right) is registered with the Securities and Exchange Commission.

Due to the absence of financial reporting, the only provable source of revenue for Uulala is fresh $1100 investments. 

Any revenue claims made by any MLM organization selling a securities offering should be viewed with a grain of salt. 

With Uulala, this is more critical. 

As per a complaint filed by the SEC in August of 2021: 

“This action concerns Defendant Uulala, Inc.’s (“Uulala”) fraudulent and unregistered offer and sale of digital asset securities known as UULA tokens, as well as its subsequent fraudulent and unregistered offer and sale of promissory notes convertible to equity (the “Convertible Notes”). 

Uulala bills itself as a “financial solutions platform that connects the world’s unbanked populations to the financial inclusion tools they need to transform their lives.” 

Uulala claimed that it had developed a functional mobile phone application (“app”) that enables users to store, transfer, and borrow money, pay bills, make purchases, earn rewards for participating in these activities, and build a credit history to qualify for microcredit loans. 

The Uulala White Paper made several bogus claims concerning Uulala’s technology, including that it used “Proprietary Patent Pending Decentralized Database Technology. This technology was owned and copyrighted by another firm; Uulala had no rights to it, and Uulala had not included it into the UULA offering.” 

In 2019, Uulala and Garcia secured an additional $500,000 through a Convertible Notes offering from four US investors. 

Garcia produced a presentation slide deck to showcase the proposal to potential investors. 

This offering document included inaccurate financial information regarding Uulala, including a claim that the company earned more than $250,000 in sales in 2019, which Garcia admits was incorrect. 

Defendant Oscar Garcia (“Garcia”), co-founder and CEO of Uulala, was the key architect of both fraudulent offers. 

We know Uulala has no objection to paying referral commissions on 40% of validation node investments (a pyramid scheme in and of itself). 

Even if a small portion of what is left is used to pay digital point withdrawals, Uulala becomes a Ponzi scheme. 

However, the most crucial issue is securities fraud. 

Oscar Garcia escaped prosecution for security fraud while working for Lucrazon Global. 

Garcia doubled down on securities fraud with his platform, Uulala.

Now he’s tripled his investment with the Batched validation node technique. 

This is unlikely to end nicely. 

The business admitted as much in an August 10th email sent to Uulala investors:

“The investigation concluded with a settlement between Uulala and the SEC in which Uulala agreed to comply with the Securities Act of 1933, just like all other companies, and to refrain from selling unregistered securities unless and until a registration statement is in effect concerning securities.” 

Given Garcia’s track record of deception, I’m convinced that what we’re witnessing here is a version of the “staking” MLM crypto Ponzi scheme. 

Players purchase tokens/coins (digital points), deposit them with the firm (staking) and get a passive return. 

Returns are paid entirely or predominantly from subsequently invested cash, equating to a Ponzi scheme. 

This will deprive Uulala of ROI revenue (in part or whole), leading to its eventual demise. 

The mathematics of Ponzi schemes ensures that most participants will lose money.

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