Disavowed Indonesian crypto scheme promises sky-high profits, and investors are biting

If someone offered you an opportunity to invest in a cryptocurrency business, backed by Indonesian conglomerate MNC Group, that promises almost 3x returns in one year, would you be able to resist?

That’s the premise of VidyCoin Community Indonesia. The group promotes a cloud mining investment scheme for VidyCoin, a cryptocurrency launched by Singapore adtech company Vidy. Members sign up for a mining contract (US$1,000 appears to be the most popular investment amount), and they will receive a partial payout in the form of VidyCoins every day until the target amount is completely mined.

The group’s video tutorials on YouTube have amassed tens of thousands of views, while several Facebook groups linked to it have thousands of members. But the community’s legitimacy has come into question.

For instance, there are scant details of how its cloud mining scheme operates or how it plans to generate the promised profits. It also offers incentives if members recruit other people as downline members, resembling a multilevel marketing scheme. Finally, some question the high returns it guarantees.

“As context, if someone promises you 3x returns in 14 months, it is already outperforming top venture capital firms,” Joel Shen, partner at law firm Withersworldwide, tells Tech in Asia, without specifically referring to VidyCoin Community Indonesia.

Several members of the VidyCoin Community Indonesia and its leader Johan Chen (back, fourth from right) / Photo credit: VidyCoin Community Indonesia

Vidy appears to be distancing itself from the community. Matthew Lim, the company’s co-founder and Asia CEO, denies that his firm is involved in the scheme.

“We are neither in any financial business nor do we promote or sell any financial scheme products,” he says. “It is extremely disappointing and unfortunate that others are leveraging a great product and ecosystem we have built for their own quick financial gains through financial schemes relating to our points system.”

MNC Group, he adds, has no involvement in any of the investment schemes surrounding VidyCoin. The conglomerate, which is behind TV channel RCTI, declined to comment and referred us back to Lim’s statement.

However, Tech in Asia has unearthed videos showing Lim participating in online events organized by VidyCoin Community Indonesia. In one video, he is seen promoting Reward City, a new online game that appears to be an extension of the community’s cloud mining scheme, even though the game supposedly has no connection to Vidy’s core business.

We have presented the videos to Lim for comment, but his representative declined to explain further.

As Indonesia’s economy struggles to recover during the Covid-19 pandemic, alternative investment products like the VidyCoin investment scheme are enticing for their offers of outsized profits.

They may or may not stand up to scrutiny, however, and many people who live outside Jakarta in particular often lack the digital and financial literacy needed to understand these products and the cryptocurrency world they hail from.

Tech in Asia reached out to 10 members of VidyCoin Community Indonesia, but only three responded. We could not independently find anyone who has received the full guaranteed returns.

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