Forex MLM: Definition And Famous Cases

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Forex MLM (Multi-Level Marketing) combines foreign exchange trading with a network marketing structure, where participants earn by recruiting others and promoting trading services or educational products. While some Forex MLM schemes operate legitimately, many have been flagged as pyramid schemes due to their focus on recruitment over actual trading. Famous cases include Venture Capital Investments LLC, ForexMMCIS, and 770capital. Such cases highlight the need for due diligence before joining Forex-related MLM programs.

Forex MLM is a multi-level marketing model used in the Forex trading industry. In such schemes, participants attract new clients, receiving a commission for their activity, as well as for attracting subsequent participants. Despite the legal status of some programs, many of them turn out to be fraudulent pyramids that deceive investors into investing in them. The article discusses the features of Forex MLM, the principles of their operation, as well as known cases that have caused a public outcry. Analysis of these examples will help you understand how to recognize potentially risky schemes and avoid financial losses.

What is Forex MLM? Definition

An MLM or multi-level marketing strategy is a method to promote goods and services through independent agents. The company’s client becomes its agent, and promotes the company’s goods or services through its sources, and gets a certain reward in return.

Forex MLM works in the same way. Brokers can offer clients favorable terms for promotion, so traders and partners will promote brokerage services with the means available. For example, you can recommend the broker to friends and acquaintances, publish an affiliate link or code on your website, blog, etc.

How do Forex MLM companies work?

As a rule, investment companies are promoted with the help of Forex MLM. At the same time, brokers can also use this scheme, especially those who have recently appeared and are practically unknown to traders.

It is important to understand that not every company is a Forex MLM. There are some distinctive features for these brokers. The features are as follows:

Multi-level affiliate program;
Accrual of bonuses to clients from deposits made by traders attracted by them;
Access to extra services and the program if a certain number of new clients were invited;
Special trading bonuses — such as reduced spreads, commissions, and a lot of trading instruments to enhance trading — from brokers for traders who invite new clients.

Forex MLM companies can include multi-level marketing principles even in the bonus program. For example, prizes can be drawn among customers who have invited a certain number of novice users.

Forex MLM’s affiliate programs

Please pay special attention to the affiliate program. It is important to know that not every broker or investment program offering a referral program is a Forex MLM. At MLM, the company offers a multi-level affiliate program, including three levels as standard:

1st level. Users invited by the client;
2nd level. Partners of users invited by the client;
3rd level. Partners of users' partners, invited.

Payments are appropriate, from the highest level 1 and partner 1 to the lowest level 3 partner of the 3rd level.

Forex pyramid scheme

A fraudulent scheme also originates from MLM – the Forex Pyramid scheme. Such companies work on the multi-Level marketing principle to attract as many customers as possible. But the main feature of the pyramid is that it doesn’t conduct any investment activity.

Such companies make payments to users from funds deposited by the most recent customers who form the first level. Further, clients form additional levels with their invitations. There can be dozens or even hundreds of such invitations, depending on the pyramid's popularity. Part of the funds serves as payments to clients (including bonus ones), and part of it remains with the fraudsters.

After the steady rising increase in the number of invited customers stops, the pyramid collapses because the fraudsters no longer have anything with which to pay their customers. Very soon after that, all the clients lose their entire funds. Immediately, the criminals quickly bundle up all the money that still “on the table” so to speak, and abscond. Pyramid scams often cause financial ruin to customers, both individual as well as corporate (e.g., teachers’ retirement funds).

Forex MLM cases

There are many Forex MLM companies. Unfortunately, many of them were conventional pyramid schemes. Let's consider a few examples of such companies.

Christopher Terry – MLM genius

Christopher Terry tried to forge his own path in MLM-type companies, like Amway. But ultimately, he became famous for creating a successful MLM project in the financial sector. Terry spearheaded and launched the financial organization called iMarketsLive.

It was both a broker and an investment company that offered clients an income of 10% to 25% per month. The users themselves promoted the company. They got their payments and distributed affiliate links among their colleagues and acquaintances.

The FXCM scandal prompted the development of iMarketsLive. In 2016, the broker started blocking traders' accounts and Terry took advantage of this. Together with iMarketsLive clients, he began to spread information about blocking, thereby promoting his own company. Thanks to this, iMarketsLive managed to attract a lot of new customers.

However, government regulators didn’t believe in Christopher Terry's honesty. The Belgian financial regulator immediately banned its activities in the country. French and Spanish regulators warned that the company "has shades of a pyramid scheme." In 2018, iMarketsLive investors petitioned the Federal Trade Commission (FTC) to order Terry's company to pay them $85 million in damages.

Venture Capital Investments LLC

Venture Capital Investments LLC became one of the latest pyramids disclosed. The organization was registered in the offshore jurisdiction of Saint Vincent and the Grenadines. Venture Capital Investments LLC operated under the guise of an investment company and offered clients passive income from investments in Forex. The organization operated not only in the USA, but also in other countries such as Bulgaria, Great Britain, and New Zealand.

The company did not invest clients’ funds but merely attracted clients using the MLM scheme. Instead, the funds were paid at the expense of clients who joined the pyramid. In total, Venture Capital Investments LLC defrauded 78 clients for over $450,000.

The Commodity Futures Trading Commission (CFTC) ordered Venture Capital Investments LLC to pay a fine of $900,000 on November 5, 2020. The investigation found that the fraudsters spent their clients' funds at their discretion, buying luxury goods and cars. In this regard, the CFTC warned pyramid investors that the fraudsters may not have the funds to pay off debts and pay the fine.

Forex MMCIS

The Forex MMCIS is a rather sensational pyramid that worked in Eastern Europe. The company was registered in Saint Vincent and the Grenadines and wasn’t licensed to conduct financial activities. The company promised a yield on PAMM accounts of up to 10% per month or up to 200% per annum.

The company aggressively employed the MLM strategy. There was also a multi-level affiliate program in effect. The ForexMMCIS Group used laser-focused marketing, which included cold calling clients and contacts via social media, etc. The platform also offered an original MLM marketing method. In 2013-2014, the company credited $1,000 to the account for each trader who got a tattoo with their name and emblem.

The Forex MMCIS pyramid collapsed in November 2014. The damage from the platform's activities ranged from $150 million to $350 million according to various estimates. As of 2023, the pyramid hasn’t resumed its work, and a redirect is being made from the website's domain to a certain German company.

770 capital

The 770 Capital Company has positioned itself as an investment company and Forex broker. The broker actively used MLM, offering favorable terms to traders who attracted new clients. The 770 Capital Company had an attractive affiliate program that allowed clients to get up to 15% of the deposits partners of the 1st level made. Also, the company's managers used aggressive marketing and attracted customers via “cold” calls and contacts through social networks.

However, 770 Capital turned out to be an ordinary pyramid scheme. Users faced the problem of non-payment of funds, followed by complaints. Clients reviewed that the company refused to withdraw money under various excuses, demanded to replenish the account, required insurance for the withdrawal, etc. Traders in their reviews even complained about threats from the managers of 770 Capital.

This 770 Capital entity has never been a broker, just a bucket shop specializing in separating its clients from their hard-earned money. They even threatened me, demanded compensation for some kind of insurance to withdraw my money earned by the sweat of my brow. It's good that they were closed. It's bad that I lost money in 770 Capital like many others.

As of 2023, the 770 Capital pyramid no longer exists. The broker's official website is not available.

Thanks to reviews on the Traders Union website, you can avoid dealing with fraudulent brokers and investment companies. You can check the broker that offers you cooperation here, in our rating of scam companies.

What are the main MLM risks in Forex marketing?

Cooperation with Forex MLM companies is associated with significant risks. Unfortunately, there are many fraudsters among such brokers and investment companies. Therefore, please be careful. Please check with the Traders Union before you start cooperating with a Forex MLM company. When checking, pay attention to the following factors:

License. A legal finance company shall be licensed by a reputable government regulator. For example, it can be regulated by the USA (SEC), Great Britain (FCA), Germany (BaFin), Australia (ASIC), etc.;
Reviews. You can get a lot of information in the reviews about whether the payments have been stable; restrictions or accounts or against the investment platform, and whether client accounts have been blocked, etc. You should watch reviews only on independent sites. For example, you can find reliable reviews about brokers and investment platforms on Traders Union.
Aggressive marketing. Fraudulent projects often call clients convincing them to invest in the platform, email them, message on social networks, etc. Honest MLM companies focus primarily on promotion through affiliate links.
Unreasonable profitability. The unsubstantiated promises of huge returns are among the shticks. For example, ForexMMCIS offered up to 200% per annum. Make sure that the income scheme is transparent and the rates are realistic before you start working with an investment platform or broker.
No-risk warnings. No manager or trading robot can provide income without risks. Even Warren Buffett has lost during trades. Therefore, the broker or investment platform must warn clients about the risks. If the company guarantees payments, there is a high chance that you are dealing with fraudsters.

Actually, is the Forex MLM scheme a fraud?

Not all Forex MLM companies are fraudsters. Multi-Level marketing by itself is a legal way to promote products, and an MLM broker is essentially no different from Amway, for example. Brokers only offer another product. Therefore, if you see Forex MLM, this is not a guarantee that you are facing a fraudster.

The problem is that MLM is a common promotion method for fraud projects. And the fact is that cybercriminals often use network marketing schemes to promote their investment platforms. It is extremely important to verify the project before starting to work with it. The risk of losing money is significant here, so beware when working with Forex MLM.

Can I earn by joining Forex MLM brokers?

Forex MLM offers the client extra income by inviting new users. However, not everything is as optimistic as it seems. The main problem is related to the fact that a lot of multi-Level marketing companies are also financial pyramids.

The risks from cooperation with such a company are as follows:

Loss of your deposit. Companies can only be promoted by customers who have already made a deposit. If the investment platform or broker turns out to be fraudsters, your funds most likely will not be returned.
A waste of time and effort. Make an advertising campaign to make money on MLM, recommend the platform, and convince the client to invest money. You may be able to do all this, but what's the point if the fraudster won't allow you to withdraw your funds?
Reputational risks. If you advise someone of an unverified project that turns out to be fraudulent, it will damage your reputation. If you then try to recommend a trusted and reliable company to someone, they will be skeptical about your recommendation.

Therefore, promoting Forex MLM is a rather risky way to generate income. We advise you to engage in it only if you are 100% sure that the project is real and there are minimal risks of fraud. Unfortunately, this is rare for Forex MLM companies.

Is it worth trying to make money on pyramid schemes?

Some people, even being sure that this is a financial pyramid, try to make money on it. It is not recommended to do it.

The reasons not to work with pyramids are obvious:

Only participants who are lucky to be at high levels earn on the pyramids. It is often impossible to predict the level you will be on;
It is difficult to predict the moment of collapse. The pyramid can "burst" at any moment, and in this case, you will never get the money back;
There are no guarantees of withdrawal. Even if you manage to earn something from investments or through an affiliate program, there is never a guarantee that you will be able to withdraw your funds.

Therefore, if you have even the slightest suspicion that a broker or investment company is a pyramid scheme, keep away! Repeat: keep away! It is much better to cooperate with trusted and reliable platforms.

Best reliable brokers you can consider

Choose a reliable broker if you’re planning to make money on Forex or multiply funds by investing in PAMM accounts. We selected the best brokers offering good trading and investment opportunities, and are reliable and secure.

Best Forex brokers
	Min. deposit, $	Max. leverage	Min Spread EUR/USD, pips	Max Spread EUR/USD, pips	Max. Regulation Level	Investor protection	Open an account
Plus500	100	1:300	0,5	0,9	Tier-1	€20,000 £85,000 SGD 75,000	Open an account Your capital is at risk.
Pepperstone		1:500	0,5	1,5	Tier-1	£85,000 €20,000 €100,000 (DE)	Open an account Your capital is at risk.
OANDA		1:200	0,1	0,5	Tier-1	£85,000 SGD 75,000 $500,000	Open an account Your capital is at risk.
FOREX.com	100	1:50	0,7	1,2	Tier-1	£85,000	Study review
Interactive Brokers		1:30	0,2	0,8	Tier-1	$500,000 £85,000	Open an account Your capital is at risk.

Avoid forex MLM scams by spotting these hidden red flags

Forex MLM (Multi-Level Marketing) schemes often promise massive returns through layered commissions. While most people know to avoid obvious scams, few notice the subtle warning signs. A major red flag is “guaranteed returns,” a term used to bait beginners. No legitimate forex trading platform can promise profits because the market is highly unpredictable. Always verify if the platform is registered with trusted regulatory bodies like the FCA, CFTC, or ASIC—this simple check can help you dodge shady schemes.

Another smart move is digging into what the company actually offers. Many Forex MLM s focus only on recruiting new members rather than real trading. If recruitment commissions dominate the company’s earnings, it’s likely a pyramid scheme pretending to be a trading service. Be extra careful if you're pressured to buy “training packages” filled with generic tips—you can usually get better educational content for free from reliable brokers.

Conclusion

Forex MLM combines elements of multi-level marketing and forex trading, which makes it an attractive but also risky instrument. Although some schemes operate legally and provide real opportunities to earn money, many of them turn out to be fraudulent pyramid schemes. A study of known cases shows that fraudsters often use emotions and inexperience of traders to extract profit. To avoid financial losses, it is necessary to carefully check companies for licenses, reviews and a transparent payment history. Attentiveness, critical thinking and verification of information will help protect your investments. Remember, the responsibility for the safety of funds always lies with the investor.

FAQs

Is it normal to get calls from promoters urging investment?

No. Even Forex MLM rarely imposes its services by cold calls and daily contacts on social networks. The more intensively they try to impose services on you, the higher the possibility that you are facing fraudsters.

The project indicates that it has an offshore license. Should I believe it?

All reputable brokers are licensed by official regulatory agencies. However, such companies, in addition to offshore documents, are licensed by well-known world regulators. Please be careful. If there are no such licenses, it could be a fraudster.

Is it suspicious if a broker requires friend invites for access?

Only brokers can set terms for gaining access to products. However, be careful if such terms exist. Check out your broker thoroughly.

What if a broker's license isn't on the regulator's site?

Fraudsters often publish false document numbers in the hope that traders or investors will not check further. It is most likely fake data if there is no corresponding information about the license on the regulator's website.

Team that worked on the article

Maxim Nechiporenko has been a contributor to Traders Union since 2023. He started his professional career in the media in 2006. He has expertise in finance and investment, and his field of interest covers all aspects of geoeconomics. Maxim provides up-to-date information on trading, cryptocurrencies and other financial instruments. He regularly updates his knowledge to keep abreast of the latest innovations and trends in the market.

Learn about our editorial policies

Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data. He is also an educator in the field of finance and technology.

As an author for Traders Union, he contributes his deep analytical insights on various topics, taking into account various aspects.

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).

Extra

Xetra is a German Stock Exchange trading system that the Frankfurt Stock Exchange operates. Deutsche Börse is the parent company of the Frankfurt Stock Exchange.

BaFin

BaFin is the Federal Financial Supervisory Authority of Germany. Along with the German Federal Bank and the Ministry of Finance, this government regulator ensures that licensees abide by eurozone laws.

CFD

CFD is a contract between an investor/trader and seller that demonstrates that the trader will need to pay the price difference between the current value of the asset and its value at the time of contract to the seller.

Forex God

The informal term "Forex Gods" refers to highly successful and renowned forex traders such as George Soros, Bruce Kovner, and Paul Tudor Jones, who have demonstrated exceptional skills and profitability in the forex markets.

Forex trading scam

A Forex trading scam refers to any fraudulent or deceptive activity in the foreign exchange (Forex) market, where individuals or entities engage in unethical practices to defraud traders or investors.