USI-TECH – A Damaged Sweetheart
The German Michael HERRMANN is definitely no stranger to the MLM scene. Most recently, he stood out as one of the most important distributors and leaders for the crypto-MLM USI-TECH. USI-TECH too is an open FinTelegram research file. USI-TECH is a German crypto-MLM venture around Mike KIEFER, Horst JICHA, and Ralf GOLD. The official headquarters of the company is in Dubai.
Despite all legal and financial difficulties, HERRMANN is still supporting the USI-TECH scheme and persuaded investors to believe in the future of USI-TECH. In his video of May 2018, he explains in detail the problems of USI-TECH in the USA, i.e. he is an informed actor! Unfortunately, he forgets to mention that the regulatory authorities in the USA and Canada have long since issued investors warnings, cease and desist orders against USI-TECH and, additionally, are also taking action against USI-TECH distributors for violation of the Securities Act.
In his video explanation, HERRMANN also admits that USI-TECH is having lethal issues. According to HERRMANN, other companies may already be dead but his USI-TECH will survive. This could also be described as an incendiary speech for USI-TECH despite better knowledge. It might have been more reasonable and honest, but in any case, it would have been legally advisable to issue clear warnings to the USI-TECH investors.
USI-TECH actors ripped off their investors big style. At least this is what some members of the BitcoinTalk forum claim. They apparently have internal information about USI-TECH, analyzed and published some of it. The list of the top USI-TECH actors also includes Michael HERRMANN. One of the BitcoinTalk guys also provided some thoughts on the financial situation at USI-TECH based on the analysis of the scheme’s wallets and came to the conclusion that USI-TECH is already a “zombie”. According to the findings, USI-TECH can only pay out the returns due to the old investors with fresh money. That’s actually exactly how Ponzi systems work in the final phase.
Canada takes action against USI-TECH distributors
In Canada, the Ontario Securities Commission (OSC) is currently conducting a lawsuit against USI-TECH and its Canadian distributors (read more here). The next hearing before the OSC in Toronto will take place on July 19, 2018. In February 2018, OSC ordered the discontinuation of USI-TECH‘s distribution activities and is now taking action against two Canadian distributors who, similarly to Michael HERRMANN in Germany, distributed the USI-TECH scheme in Ontario, Canada. This has nothing to do with scam or not scam, but simply with the fact that OSC qualifies the distribution of USI-TECH packages is an unauthorized distribution of financial instruments (Source: Amended Application OSC Staff)
- USI Tech Limited (“USI Tech”) operates a multi-level marketing operation which is headquartered in Dubai. There is no evidence, however, to confirm where it is based or to identify its directing mind or management.
- USI Tech carries on business as www.usitech-int.com (the “website”). The website is maintained by a third party administrator, and the information about the true registrant is private.
- USI Tech markets itself as an “…Innovative and Automated Bitcoin Trading Platform.”
- USI Tech, Parker and Combden may have engaged in trading of securities which constituted a distribution without a prospectus or an applicable exemption from the prospectus requirement, contrary to section 53 of the Act;
- USI Tech, Parker and Combden may have acted contrary to the public interest;
- Staff are continuing to investigate the conduct described above;
In a nutshell: the OSC regards USI-TECH and its distributors as illegally acting actors and thus continues its investigations. The authorities in North America are only paving the way for regulators in other jurisdictions. We received information from the German BaFin and the Austrian FMA that the crypto-MLMs relating to mining and trading are carefully evaluated. The FMA in Austria recently ordered the closure of the INVIA crypto-mining scheme.
Therefore, distributors, leaders, and promoters of such crypto-MLM’s should also be extremely careful from a legal point of view. Regardless of whether the project is a scam or not. If the project subsequently proves to be a scam, distributors may be confronted with a legal tsunami: on the one hand the supervisory authorities, which hold you liable for the unauthorized sale of financial instruments subject to authorization, and on the other hand investors that lost their money.
COINSOLUTION – Architect of ARBITRACOIN?
Michael HERRMANN is indeed a forward-looking and “thinking outside the box” marketing man. He, therefore, announced in the video that he would dedicate himself to other things such as arbitrage in the future. According to HERRMANN, his COINSOLUTION used to work exclusively for USI-TECH but no longer will do so. A few months ago, COINSOLUTIONS posted on its Facebook page:
Coinsolution is our community. We also inform about various things in the crypto market beyond USI-TECH. We want to offer our community added value. USI-TECH is our business within the Community???
But now they’re reorienting themselves towards arbitrage and more forward-looking projects.
COINSOLUTIONS with USI-TECH and ARBITRACOIN
In the video (starting from minute 16) Michael HERRMANN discusses that USI-TECH will remain his darling forever but that he now also wants to go towards arbitrage. At COINSOLUTION – a project that HERRMANN is running with Christian ARNOLD and Daniel STERZELMAIER – they have other projects in the pipeline and work on them already. In this respect, we can assume that COINSOLUTION and Michael HERRMANN are either co-founders of ARBITRACOIN or at least among the top leaders and early supporters.
This is also supported by the fact that Michael HERRMANN actively promotes ARBITRACOIN on his personal website www.michaherrmann.de The USI-TECH, on the other hand, can only be found via a respective “tag”.
So on our ARBITRACOIN map, we have again occupied a few white fields, established a few contexts and found further names. We will continue with our investigations.