Crowd1: All revenue comes from product sales
There are concerns that Crowd1's business model mirrors that of a pyramid scheme, where money has to be sent up the chain in order to sustain it.
JOHANNESBURG - Crowd1 said that it was the victim of unrighteous slander and welcomed any investigation into how it operated.
Crowd1, which launched in South Africa in November last year, is run from different countries as a network marketing company.
There are concerns, however, that its business model mirrors that of a pyramid scheme, where money has to be sent up the chain in order to sustain it.
While responding to several questions by Eyewitness News, Crowd1 has been at pains to explain that its profits are derived from selling products and not because anyone has to pay upfront to be a member.
This despite claims by some people that they were required to fork out the entry-level R1,800, for which they received a welcome “educational” package and promises of big monetary returns.
But that is dependent on the recruitment of others, which has raised suspicions of a possible pyramid scheme.
Jonathan Ström, who’s identified as Crowd1’s chief of Africa expansion, insists all revenue comes from the sale of products.
While the Reserve Bank’s prudential authority is investigating, Ström said that there’s no need for the company to be registered as a financial services provider because that’s not what it offers.
Crowd1 has bemoaned its banning in countries such as Namibia and the Philippines, adding that it welcomed any kind of investigation into its dealings.