For some time now, many popular Indian crypto You Tubers are endorsing or promoting this venture with a expectation of huge bull run for this token.
A new crypto token called CTO (Cloud Token) was launched by a Malaysia based entity, last month. However most of its social media communication, marketing videos are being presented in Chinese along with some English.
Please note that this is yet another mobile app based crypto ponzi scheme. It has got all the red flags of a ponzi MLM scheme.
People like Sheng Zhao are being presented as BIG names associated with this venture. But it should be noted that Sheng Zhao was also associated with the ponzi scheme of PLUS token that had almost exact business model.
The company tells investors that they are earning through Arbitrage on several crypto exchanges. Arbitrage is used to take advantage of minor differences in rates of various cryptocurrencies on different crypto exchanges at a same time. So they lure investors to "invest" their cryptocurrencies like BTC, ETH etc. in their wallet to provide liquidity to arbitrage trading.
In return, investors are promised an average of 10-15% return every month.
Interestingly, while arbitrage earnings are earned in the cryptocurrencies invested but investors are paid the RoI in form of CTO tokens.
Beside this, investors are paid fat commissions for referring in new people. For every referral at level-1 you are paid a matching 100% of CTO he/she earns on her investment. For level-2, it is 50% and then upto next 21 levels, it is 5% for referrals at each level.
If you add all these, it becomes 245%. Add your 100% to it, it becomes 345% return on your investment. Apart from that, you're also offered Rank commission bonus, special scheme bonus and awards etc. On top of these, company is also making a handsome profit!
How much profit do you think can be made legitimately and consistently through arbitrage? Even if there is a huge gap in rates, there isn't much volume at that price point in most tokens. So small trades will normally fill all price gaps in no time.
The company claims to implement its proprietary JARVIS intelligent trading system for this. But some investigations can easily reveal that its so-called mobile wallets are not actually true wallets but just some Java interface that connects with their own servers. Thus in effect, you transfer your funds in their wallet and they keep showing you a dummy balance in your mobile wallets. If this company shuts down its servers, you won't be able to withdraw your funds with your mobile wallet credentials. So it's all centralized systems.
The CTO token was launched at $0.30 and is constantly shown as rising in prices and is currently around $0.40. People will give you the reference of PLUS tokens whose prices rose over $90 with a similar business model. But all these prices are some internal data and nothing else.
Actual funds are being paid from the principal investment of new investors. So this is a classic ponzi scheme where old investors are paid by new investors. And when the investor base becomes large enough where they can't bring in the exponentially rising requirement for new investors to pay old investors, the business fails. But before that point, operators vanish in the thin air.
If you check the credentials of the key persons of the company, you won't find any credible past track record of success. I'd recommend you to go through this article for details on it.
Although this CTO token was launched less than a month ago, please be beware that such operations don't last long enough. Many smart people think that they will easily recover their money and gain a huge profit as they joined earlier. The fact is you can never be sure. And please don't think to earn money from such models by risking others' money into it.
In case, you have already invested, I'd suggest you to cash out. They charge some 8% penalty to cash out within first 30 days. If you want to wait for some time, you should cash out before their July marketing event in Malaysia. Since they are offering several lucrative offers to bring in many investors before that event, there are high chances that you would be able to successfully cash out prior to that event but don't linger on for too long or you may loss your principal funds too.
You're explicitly warned from me here.
Stay away from this company and don't promote it for the benefit of whole crypto industry!