National Bank alerts public to suspected financial pyramid scams

The National Bank of Georgia (NBG) has reported that notices have recently circulated on social media and in news outlets warning of companies soliciting funds from the public with promises of high returns through crypto-asset trading.

“This type of activity may represent a classic financial pyramid scam model, where the primary objective is not business development, but rather the recruitment of numerous new members and the collection of their funds. Regardless of how successful a company may appear at any given moment, such schemes inevitably collapse when it becomes impossible to recruit new members or secure additional funding, leaving the company unable to meet its obligations to participants.

All such schemes carry an exceptionally high level of risk, as predicting their collapse is virtually impossible.

The National Bank of Georgia once again urges the public to exercise extreme caution before investing their funds to avoid financial loss risk. Above all, citizens should independently verify a company’s credibility, operational background, and solvency, and ascertain whether any supervisory authority regulates it. To mislead the public, such entities may incorporate terms like ‘financial’, ‘brokerage’, or ‘investment’ into their corporate names; words that do not automatically imply that the entity is regulated or licensed by the National Bank of Georgia.

We strongly encourage members of the public to base any investment decision strictly on reliable information, and only after thoroughly examining and understanding the potential risks involved,” the National Bank’s warning read.