The National Bank of Georgia is warning the public about surging campaigns on social media, including Facebook pages and groups, offering fast returns through crypto-asset trading investments. Lasha Gzirishvili, Head of the Consumer Protection Department, urged citizens to exercise extreme caution before investing their funds and advised them to assess the risks of potential losses in advance.
“Such activity may represent a classic ‘pyramid scheme’ model, whose primary goal is not investing money in real business operations or profitable assets, but drawing in large numbers of new participants and pooling their funds. After all, it is from these funds that existing participants are paid supposedly commercial profits—in this case, from crypto-asset trading. Moreover, the more people are drawn into the scheme, the longer its viability is sustained,” Gzirishvili emphasized.
According to him, in the initial phase of the scheme, while there is an active influx of people, the campaign may appear entirely successful, and participants may even receive certain payouts. However, at a certain point, when attracting new members and additional funds becomes impossible, the company loses its ability to fulfill its obligations, and the pyramid inevitably collapses.
In such situations, depositors are most often denied fund withdrawals under the pretext of technical glitches, and are sometimes even asked to pay an additional fee to retrieve their investments.
“Although many consumers are aware of the high risks, they often enter such schemes deliberately—hoping to turn a profit and withdraw their invested funds before the collapse,” Gzirishvili noted.
In his assessment, such an approach is extremely dangerous because participants do not know at which stage of the scheme’s lifecycle they are joining, and predicting the exact moment of collapse is virtually impossible. Consequently, the likelihood of a total loss of money is exceptionally high.
The National Bank noted that such schemes heavily exploit the desire for quick wealth. In this regard, when encountering attractive investment offers, it is crucial not to make impulsive decisions, but rather to gather detailed information and carefully weigh the potential risks.
“Look for information regarding the company’s reliability, actual operations, and solvency. To mislead citizens, such entities may include words like ‘financial,’ ‘brokerage,’ ‘investment,’ and the like in their names; however, this does not mean the entity is genuinely regulated or licensed by the appropriate supervisory authority. Study not only success stories, but also cases where participants in such schemes failed, as well as the reasons behind them,” Gzirishvili stated.
He also added that to protect consumer rights, the National Bank of Georgia continuously refines its legislative framework, giving priority attention to vulnerable groups. According to him, despite current regulations, the final decision always rests with the individual; therefore, the National Bank urges citizens to thoroughly verify information when evaluating investment offers, assess risks soberly, and only then make financial decisions.
