Police investigating DistributeX operations

The police are part of a joint investigation with other regulatory authorities into the workings of obscure crypto marketing company DistributeX, MaltaToday has learnt.

The company’s business model was cast into the spotlight following a MaltaToday investigation that showed how it resembled a Ponzi scheme. 

“The Malta Police Force is aware of these reports and joint investigations, with other entities are being carried out,” a police spokesperson said in reply to questions by MaltaToday.

The police join the Malta Financial Services Authority (MFSA) and the Malta Competition and Consumer Affairs Authority (MCCAA) in their ongoing probes over DistributeX’s potentially illegal business structure.

The MFSA has already issued a public warning about DistributeX, saying the entity is neither registered nor authorised to provide financial services in Malta.

The MFSA said none of the entities operating DistributeX, or similar variations, are registered as companies in Malta. It added that neither the entity nor any individuals, representatives or promoter groups operating under those names have ever been licensed, authorised, regulated or otherwise approved by the authority.

The authority also said it had identified features in DistributeX's business model that resemble characteristics commonly associated with multi-level marketing arrangements and may also exhibit elements linked to pyramid schemes.

Last Sunday, this newspaper reported on the frustration and betrayal felt by DistributeX customers who invested hundreds and, in some cases, thousands of euros into the company.

They spoke of how the funds have now been locked and access to their own money has been restricted.  

After the company’s operations were exposed, members were told to pay a further €300 in what DistributeX claimed were regulatory fees. It claimed the amount was to be paid to the MFSA – a claim the regulator has strongly denied.

After concerns were raised by members in group chats administered by DistributeX team leaders, those raising the said complaints were first muted, and eventually kicked out.