Cloud Token, an entity behind an alleged unregistered securities investment scheme, registered with the Australian Securities and Investments Commission (ASIC) on May 10th. The company, identifying itself as "Cloud Technology & Investments," appears to be leveraging this registration to attract further investment globally.
Despite this Australian registration, Cloud Token maintains no physical business operations within Australia. Market analytics indicate Australia is not a significant source of its investment revenue. Instead, the scheme is reportedly managed by individuals in Singapore, actively soliciting funds primarily from investors in Japan, the United States, and Brazil.
The motivation for registering with ASIC, given this operational disconnect, raises questions. ASIC has a history of lengthy investigations into securities fraud. By the time the Australian regulator acts, operators and top affiliate investors of schemes like Cloud Token often disappear with collected funds.
Cloud Token can present its May 10th ASIC registration for "Cloud Technology & Investments" as a mark of legitimacy, effectively using it as a marketing tool for alleged securities fraud. This registration, a standard Form 201 application, is a three-page document for establishing a proprietary company. A Form 201 filing requires only general company details. These can be easily fabricated or arranged through shell corporations and local agents.
A full fraud investigation and attempts to verify the provided details would likely commence long after Cloud Token has amassed and moved investor capital. To date, Cloud Token has not submitted any audited accounting reports to ASIC. This absence means no verifiable evidence exists that the company uses legitimate external funds to pay promised returns to its affiliate investors, a common characteristic of Ponzi schemes.
Even if the ASIC registration were taken at face value, its legal implications are confined to Australia. Cloud Token remains an illegal investment opportunity in every other jurisdiction where it solicits funds, including significant markets like the United States and Japan.
This prompts inquiry into why Cloud Token has not sought registration with financial regulators in Singapore, its alleged base of operations. The answer appears straightforward: Cloud Token operates as an app-based multi-level marketing (MLM) crypto Ponzi scheme. Such schemes typically avoid rigorous regulatory scrutiny in jurisdictions with robust financial oversight.
Concerns about ASIC's efficacy in preventing such schemes are not new. The history of similar cases suggests ASIC may not act quickly on potentially fraudulent registrations. A recent example is the AWS Mining Ponzi scheme. AWS Mining also used its Australian registration as a marketing tactic. Despite receiving a securities fraud notice in Texas and subsequently collapsing, AWS Mining remains registered with ASIC. The company has held this registration since 2017. Throughout that period, it never filed any audited accounting reports.
Therefore, the value of Cloud Token's ASIC registration must be viewed critically. Investors performing due diligence should specifically ask why Cloud Token has not registered with the Financial Services Agency (Japan), the Securities & Exchange Commission (US), or the Monetary Authority of Singapore.