The FSCA of South Africa has issued a Gift of Legacy caution. The warning comes in response to inquiries from South African citizens.
Gift of Legacy is not engaging in securities fraud, the FSCA has confirmed, by the warning, it issued on March 23 in response to inquiries from the general public.
This would be against the Financial Advisory and Intermediary Services Act of South Africa.
Instead, the FSCA puts “other regulators in South Africa” on the hook for its conclusions. This is likely referring to the National Consumer Commission, which oversees the Consumer Protection Act (CPA).
In South Africa, pyramid schemes are prohibited by the Consumer Protection Act.
The South African Reserve Bank, which looks into “illegal deposit taking” in South Africa, is another option. A pyramidal gift-giving arrangement may constitute unlawful deposit-taking.
It’s hardly surprising that the FSCA determined Gift of Legacy wasn’t committing securities fraud given that it is an MLM gifting scam.
Affiliates in MLM gifting programs pay a fee, making them eligible to receive gifts from later participants.
While gifting schemes lack the investment requirements of a securities offering, MLM Ponzi schemes do have a pyramid element.
A matrix-based giving program technically qualifies as an investment and pays a return once the matrix is full. However, regulators usually make a distinction between the two.
For instance, the US SEC deals with securities fraud. The FTC oversees the regulation of pyramid schemes.
Gift of Legacy, a $100 per pop giving program, debuted in late 2021. Chris Hattingh and Candice Donadel, two South African nationals, are the con artists.
After a three-hour meeting in February, Hattingh said the FSCA had approved the Gift of Legacy. Contrary to what the FSCA’s warning and referral to a more suitable authority would imply.
The website for Gift of Legacy was unavailable for maintenance at the time of publishing.
Gift of Legacy has grown quickly and with much excitement over the past several months, however, because of this, our community platform is not operating at its full potential and needs some TLC.
We must act quickly to upgrade and improve GL’s performance and efficiency while retaining your user experience since we respect your security and confidence in the system.
The queuing mechanism served as a stopgap measure to help with the load. We are forced to temporarily shut down the system to protect its integrity and your user experience.
We advise you to put giving on hold at this period.
We appreciate your support and hope to see you online again soon.
Gift of Legacy recruiting began in South Africa but has now moved to Russia (60 percent), Germany (9 percent), and Israel (7 percent ). This is based on Alexa’s study of website traffic.
The Gift of Legacy pyramid scheme was alerted to by the Central Bank of Russia last month.