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This is different from pyramid schemes, which are illegal in Australia and which don’t sell any products, profiting solely from falsely advertised employment opportunities.
According to text conversations seen by The Australian Financial Review, Blue Tongue Tradehouse members have used Bumble BFF, a branch of a global dating app that matches those seeking friendship rather than relationships, to attract new recruits.
‘Mentors’ sought
One 27-year-old woman told the Financial Review she had matched with a 31-year-old Melbourne-based woman called Latoya, who did not mention her involvement in Blue Tongue Tradehouse until several days after the pair matched.
“Usually I just chat with people on Bumble, but after a day or two she suggested we call,” she said, requesting her name be withheld.
After speaking on the phone twice, Latoya asked the 27-year-old woman whether she would consider being a “mentor” for her growing business.
“She then brought up Blue Tongue Tradehouse and said it would be a great way for me to make money outside of my job and that she had already made more than $10,000.”
TikTok is being used by Blue Tongue Tradehouse to recruit new members. AFR
The woman declined to take part, and Latoya’s Bumble profile was soon deleted. But the Blue Tongue Tradehouse network extends beyond Bumble and into TikTok, a popular Chinese-owned video sharing app.
On the app, Blue Tongue Tradehouse members show lifestyle content that often includes video footage of their trading screens.
When contacted, a Blue Tongue Tradehouse representative declined to comment.
ByteDance, the company that owns TikTok, said it made every effort to tkae down content that attempted to financially harm its users.
“When we see content that depicts or promotes Ponzi, multi-level marketing or pyramid schemes we remove it,” a TikTok spokeswoman said. Bumble did not respond to questions in time for publication.
The Australian Securities and Investments Commission has warned social media users about Blue Tongue Tradehouse, saying it does appear to have many of the traits normally associated with a pyramid scheme.
For everyone in the scheme to make a profit, you require an unlimited number of new members. Eventually, someone misses out.
— ASIC spokesperson
“Part of what makes people vulnerable to schemes such as this is that they come through a medium that people don’t typically associate with making a financial decision,” an ASIC spokesperson said.
“People should be wary of any scheme where you make money by convincing other people to join, and part with their money too,” the spokesperson said.
“For everyone in the scheme to make a profit, you require an unlimited number of new members. Eventually, someone misses out,” they said.
IM Mastery, the US-based organisation that provides the foreign exchange education that underpins the software sale, has been banned from offering financial services and products in Belgium and has been the subject of warnings by France and Spain.
“The system proposed by International Markets Live exhibits features characteristic of a pyramid scheme,” a release from the Financial Services and Markets Authority, Belgium’s financial regulator, reads.
The foreign exchange trading software Blue Tongue Tradehouse sells is powered by MetaTrader 4, a white-labelled electronic trading platform that bills itself as an automated way to trade assets in various markets, with a focus on margin trading.
Margin trading allows someone to borrow several times their collateral on a trade, meaning they are responsible for all losses, which can far exceed the initial investment.
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