Coolcat trading floor collapses, more than VND200 billion vanishes

Investors, from freelancers in Hanoi to sale officers in HCM City, have poured several million VND to several hundreds of million dong into Coolcat. About VND200 billion (nearly US$9 million) is likely to disappear.

Coolcat trading floor collapses, more than VND200 billion vanishes

Sang has transfered VND200 million to Coolcat's officer

An investor named Sang is seen smiling on his account on the Zalo app with his family members, but the owner is now in bad mood. Everything began with the collapse of Coolcat.

Sang has lost more than VND200 million since he joined Coolcat. He initially planned to withdraw the money and interest after 15 days. But things did not occur as he wanted: the trading floor collapsed 10 days after he put money into the account. The money was from a relative.

“My wife and I now have to use money we have been saving for many years to build a house to pay to my relative. Meanwhile, we have to feed two children,” Sang complained.

According to Sang, he remitted money to Coolcat’s officers twice, totaling VND200 million.

Why Coolcat? Sang said a co-worker at the office introduced Coolcat to him. Sang’s wife tried to prevent him from making investment with such a big amount of money, but he ignored her advice.

The VND200 million amount, is a lot for him and can only be obtained after 2-3 years of working, he said.

“We dare not inform my parents about the loss of money. They do field work in the countryside. We are afraid they will be shocked,” he said.

Sang is a freelancer. He is a new member of a Zalo group of dozens of people who have lost money because of the trading floor's collapse.

The members have exchanged information since the collapse occurred and have told Sang to report this to the HCM City police. On April 27, Sang began writing the first denunciation.

While Sang is a freelancer and has an unstable income, Nam, another investor, has a stable income from a job in the tourism industry.

Forty-five days after joining Coolcat, Nam had already lost VND637 million by the time the trading floor collapsed.

On April 15, when other investors were worried because money had not poured into their accounts as usual, Nam managed to contact Coolcat and was reassured that Coolcat had temporarily stopped the app to serve the police’s investigation.

A representative of the trading floor even tried to restore investors’ confidence by informing them that if investors did not withdraw money at that time, Coolcat would give $50 to each of them once they provided the ID numbers creating initial accounts.

 

Just after two hours of collecting ID numbers of the investors, all the ‘bogus’ Zalo nicknames of Coolcat’s officers were locked. Investors never received the promised $50.

On April 19, Nam and many victims came to the HCM City Police to denounce the asset swindling and appropriations via Coolcat. Ironically, Coolcat’s officers and players contacted via Zalo chat. Coolcat’s bogus accounts are always ‘on’ to send messages to players on the floor.

Nam has come forward and gathered 500 claims from victims with total damages worth VND200 billion.

In order to carry out insured transactions (100 percent of capital), investors have to spend enough money to reach a certain level among the insurance packages offered by Coolcat. There are six investment levels with the lowest at VND1.26 million and the highest at VND210 million, corresponding to incomes from VND60,000 to VND9 million per day.

“A family in the north reported a loss of VND9 billion as all family members played on the floor,” he said. “As far as I know, another family in HCM City lost VND3 billion. Many people borrowed money from usurers and the ‘black world’ to play on Coolcat. One man called me and said he wanted to commit suicide because of the loss of big money”.

Signs of multi-level marketing

According to some analysts, this is a BO (binary option) investment mode. Players predict the ups and downs of bitcoins, gold and foreign currencies. They need to predict whether the prices will go ‘up’ or ‘down’.

The results are announced after 30 seconds. If their predictions are exact, they get money, $0.1 at minimum, and if the answers are wrong, they lose the deposits.

Coolcat’s rules are as follows: investors get 73 percent, insurers 14 percent, analysts 10 percent and Coolcat 3 percent.

For example, when an investor places an order of $1 and wins, the total amount of money to be collected would be $2, including $1 worth of principal and $1 worth of interest. The profit would be shared as follows: $0.73 for the investor, $0.14 for insurance company, $0.1 for analysts and $0.03 for Coolcat.

In order to carry out insured transactions (100 percent of capital), investors have to spend enough money to reach a certain level among the insurance packages offered by Coolcat. There are six investment levels with the lowest at VND1.26 million and the highest at VND210 million, corresponding to incomes from VND60,000 to VND9 million per day.

Lawyer Luong Van Chuong from SBLaw, the HCM City Bar Association, said the model of Coolcat shows signs of illegal multi-level marketing (MLM) which invites and awards money to those who join the trading floor. The floor uses the money it collects from newcomers to pay to the older players. If there are no more newcomers, the system will collapse. 

Quang Dinh

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