Neville Lahiru
It’s match season again as Sri Lankan cricket fans flock to witness Lanka Premier League (LPL) 2023. While nowhere near the scale of some of the bigger franchise cricket leagues like IPL and Big Bash, the local event has garnered a decent fanbase on the island. Interestingly, this year’s edition of LPL has posed some eyebrow-raising moments and one of them includes a peculiar sponsor in the form of MTFE.
MTFE, also known as Metaverse Foreign Exchange Group Inc is one of the latest additions to the tournament, coming in as a sponsor for the Jaffna Kings team at LPL 2023. Of course, it didn’t take long for some fans to start questioning the company’s presence at a national-level cricket league. The online backlash was noticeable enough that the Jaffna Kings players began covering the MTFE logo on their jerseys. But who is MTFE and why is the name drawing negative attention?
MTFE markets itself as a trading platform for forex, commodities, and stocks, although, its primary focus appears to be cryptocurrency trading. Interestingly, MTFE Sri Lanka’s online presence does little to clarify its value offering or how the enterprise operates to the general public. In fact, MTFE Sri Lanka’s online presence is limited to a bare minimum Facebook page and a WhatsApp group. Upon closer inspection, the questions only keep adding up.
Dubious presence
For instance, MTFE Sri Lanka claims it’s part of Canada’s Ontario-based MTFE Group. While the Metaverse Foreign Exchange Group indeed claims an Ontario address, the Ontario Securities Commission (OSC) specifically states otherwise. As per the OSC, the company “isn’t registered in Ontario to engage in the business of trading in securities.” This was part of a wider alert sent by the OSC early last month which included several other dubious companies.
It’s worth noting that while the OSC mentions mtfe.ca as the MTFE group’s official website (same site that MTFE Sri Lanka has linked on its FB page), the domain has since been abandoned and moved to mtfe.io. Speaking of websites, MTFE Sri Lanka doesn’t actively promote its website, despite seemingly having one. Instead, its main communication appears to be WhatsApp and Telegram groups. We’ll get to that a bit later.
The Binance of it all
MTFE Sri Lanka’s tagline around the operation revolves around earning passive income with no effort. While that in itself would set off alarms, it’s worth looking at how it really works. According to its local site, the deposits and withdrawals part of the trading is handled via Binance. This means users would need to set up and link a Binance account to MTFE in order to “trade” crypto. Actual deposits and withdrawals are done via Binance’s P2P mechanism, something that’s already possible on Binance itself.
As opposed to depositing money directly, users are first asked to transfer existing funds/crypto from Binance to MTFE’s platform (crypto wallet-to-wallet transfer). Then comes the trading, where the platform describes three options for the user. First is the typical trading you would do on platforms. The second is dubbed “VIP Signal,” essentially a direct message that tells the user what to buy/sell, how much, and what time the action needs to be taken. This is where the WhatsApp and Telegram groups come into play. Users are sent specific texts where they would need to perform an operation to the exact specifics. Interestingly, MTFE notes that one would need to have a minimum of $50 in deposits to use “VIP Signal.”
Then there’s “AI Smart Transaction” trading which basically does the whole thing for you automatically. Here, users would need to have a minimum of $26 in balance. Once the supposed trading is done, users can only withdraw funds by transferring their crypto back to Binance and following through there.
In other words, users basically transfer crypto from Binance to another platform, trade, and transfer back to Binance while paying a service fee to MTFE.
The regulatory question
As with other markets, carrying out financial services requires regulatory approval in Sri Lanka. According to Finance Business Act No. 42 of 2011, conducting a finance business and accepting deposits without a license from the Central Bank of Sri Lanka is a punishable offense. Typically, only licensed finance companies, commercial banks, and specialized banks are authorized to accept deposits from the public, lend, and/or invest money.
It’s in this landscape that one begs the question of how a few months-old dubious enterprise managed to come up as a sponsor at LPL 2023. If the FTX partnership with the ICC was any indication, it stands to reason that a relatively unknown crypto operation would undergo screening prior to granting sponsorship status. However, that doesn’t appear to be the case.
Unfortunately, it doesn’t help that MTFE isn’t the only questionable presence at the tournament. For instance, B-Love, the Kandy team’s main sponsor is a crypto network that promises passive income and “financial prosperity.” LPL 2023’s title sponsor SkyFair News is basically a pseudo-news site that barely gets 4000 views per month according to Similarweb. It also seemingly operates a WhatsApp group-focused operation similar to that of MTFE.
We’ve been here before
Of course, MTFE Sri Lanka comes at a time when crypto-enabled pyramid and ponzi schemes have run amok on the island. In fact, CBSL itself has warned the public about pyramid schemes like OnmaxDT, Sport Chain App, and Fast 3Cycle International.
One big part of these schemes is that they often target the most vulnerable communities in the country. According to the FCID, the Sport Chain crypto scheme alone managed to swindle over LKR 15 billion from more than 8,000 Sri Lankans. Other fraudulent operations like Whaleboost opted to use influencer-type accounts to seemingly legitimize themselves and attract more mainstream attention.
In any case, if you’re still unsure about a certain entity’s financial legitimacy, here are a few things worth noting:
- Think twice before choosing to put money into a new platform, especially when it comes to crypto. In MTFE Sri Lanka’s case, there’s little reason why existing funds need to be transferred from Binance to MTFE to essentially do the same function with little to no protection. The most likely logical reason would be that it’s a scam.
- If the main marketing line is around earning easy money fast, it’s most likely a scam.
- If there’s no irrefutable proof of any ambitious claims, chances are it’s a scam
- Does the financial service operator have regulatory approval? If not, then it’s probably a scam.
- Does the business boast about its operational capability but use Gmail for primary communication? It’s probably a scam too.
As of now, it remains to be seen how things will transpire with MTFE. There’s little to verify its legitimacy. Although MTFE itself denies its questionable nature, stating that any user can always withdraw all of their funds from the platform. However, the question comes down to business continuity. After all, it’s now common to see new (crypto-related) schemes pop up, promising financial gains with minimal effort, only to disappear after a while.
Waiting for the signs
At the end of the day, cricket carries a lot of emotional weight for many Sri Lankans. Such a public platform would be the ideal stage for any brand to legitimize its presence. As such, time will tell if the CBSL would opt to make a point of notifying the general populace and take prompt action should MTFE prove to be fraudulent.
It should be noted, however, that the CBSL has issued a recent notice warning the public to be wary of possible pyramid schemes. The regulator mentions that while it has notified the public of eight such schemes, some may be still under investigation. “Some of them may even be portraying themselves as virtuous by sponsoring popular sporting, religious, and entertainment events,” states CBSL. While it doesn’t directly name MTFE, it’s fair to assume that the online backlash over MTFE at LPL 2023 would have likely prompted a response from CBSL.
Either way, the hope is that the regulator would move in time before the situation gets potentially problematic. Until then, perhaps our collective LPL 2023 attention could be directed at how questionable entities like MTFE are allowed to build credibility off cricketing platforms. Surely that would take precedence over how a singer allegedly mispronounced a single word of the national anthem?
Update [17/08/2023]
As of August 10, the Resolution and Enforcement Department of CBSL has commenced a probe on MTFE Sri Lanka. The regulator comments that as per its findings so far, MTFE Sri Lanka’s operations fall in line with typical pyramid schemes.
Additionally, the Colombo Chief Magistrate’s Court ordered a travel ban on five individuals associated with MTFE Sri Lanka. The ban was issued after the Financial and Commercial Crimes Investigation Division presented facts on the organization to the courts. However, one of the five MTFE Sri Lanka personnel has reportedly left the country already for Dubai.
Update [23/08/2023]
The Central Bank of Sri Lanka has officially declared MTFE as a pyramid scheme, listing it as one of nine prohibited operations in the country. Interestingly, it’s worth noting that the announcement comes only a few days after the Lanka Premier League 2023 tournament has concluded.
“its primary focus appears to be cryptocurrency trading” is totally wrong statement, this app doesn’t trade like that
bro please just use the app for a month and then write your content ,may be you are a good writer but this one is bullshit, don’t talk nonsense
If you say so
The red flags are there to see. But as usual in Ponzi schemes, there is willful negligence of due diligence by the public.
In my town, I personally know of an SI policeman pawning gold to invest in MTFE, any number of teachers and curiously enough, quite a few tuk drivers too. There’s not much regulators can do until the house of cards collapses.
That is the most unfortunate part of it all. Reactive measures will do very little when the damage is already done. You’d think authorities would be more stringent after someone swindled millions out of people. Sigh.
I’m using from 2months and now I’m scared either I should carry on or quit and opt some other method for trading.
I can’t tell you what to do with your money. But if I were you, I’d get out of this as soon as I can, especially if it’s something that says “you can get rich” as its main marketing point.
weĺl said, I think its must scam just wait for a week most probably we get the results
MTFE has suspended all type of withdrawal in India from last week, the support was saying it will take 12-24 hours to restore the service but nothing worked since 7 August, Please be cautious with your hard earned money
pls stop and take ur money back . my best friend is hopeless after investing in mtfe and had lost over 150 lakh rupees in sri lanks
For sure this MTFE here in Africa especially in TANZANIA started to gain much members who are students in various college and university due to its passive way of generating income.
But the question is for how long it will hold before collapsing meanwhile withdrawal problems emerged in recent weeks many users complain they can’t withdraw money.
My elder brother is settled in usa and is a member of usa police, he used mtfe himself, but came out of questionable reverse mtfe in force. So you don’t have to download the MTFE app in the USA.
The statement that mtfe app does not download in usa is false
I assure you, it’s not
It’s a Ponzi scheme as withdrawals are stopped for the last one week . And millions of people are afraid to lose millions of dollars.