The Central Bank of Sri Lanka issued a stark warning on May 31st, identifying eight multi-level marketing (MLM) and pyramid schemes operating illegally within the country. These operations, which include companies like Tiens Lanka Health Care and crypto scams such as Sport Chain App, have been under scrutiny by the nation's financial regulator.
Investigations by the Central Bank have concluded that the listed schemes violate Sri Lankan law. Promoters of these operations have reportedly misled potential recruits by claiming official approval from the Central Bank, a claim the regulator explicitly denies. The Central Bank has stated it has no agreements with any of these entities.
The identified schemes encompass a range of fraudulent activities. Tiens Lanka Health Care, also known as Tiens International or Tiens Group, is a Chinese company that has reportedly targeted developing economies. Best Life International promoted an MLM centered on moringa supplements, while Global Lifestyle Lanka offered a multi-niche product range. Mark-Wo International and VML International appear to have collapsed or been abandoned, with Mark-Wo International's website no longer active. Fast 3Cycle International, or F3C, reportedly collapsed in early 2021.
More concerning are the cryptocurrency-related scams. Sport Chain App, operating under the guise of Sports Chain ZS Society Sri Lanka, is identified as a cryptocurrency scam. OnmaxDT is explicitly labeled a crypto Ponzi scheme. These schemes exploit the public's interest in digital assets to facilitate their fraudulent operations.
Operating a scheme in contravention of Section 83C of the Banking Act, No. 30 of 1988, is a criminal offense in Sri Lanka. Individuals found guilty face significant penalties. These can include imprisonment for up to three years, a fine of up to one million rupees, or both.
The penalties escalate for willful or knowing offenses, particularly those causing damage or harm. In such cases, offenders face rigorous imprisonment ranging from three to five years. They may also be subject to a fine of two million rupees or double the aggregate amount received from participants, whichever is greater.
The Central Bank has formally requested the Attorney General to consider initiating criminal proceedings against the operators of these schemes under the provisions of the Banking Act. This action signals a strong intent by Sri Lankan authorities to combat financial fraud and protect consumers from predatory schemes.
As of January 21st, 2025, the Central Bank of Sri Lanka has expanded its list of warned pyramid schemes, now encompassing twenty-one MLM companies. This indicates a growing problem and the regulator's ongoing efforts to address it.