India's Ponzi problem has quietly turned into a full-fledged industry, and a large part of the factory now runs offshore while the casualties sit in Indian living rooms.
India is no longer dealing with so-called ‘isolated scams’ on WhatsApp and Telegram; it is confronting an increasingly industrialised Ponzi-MLM ecosystem that manufactures legitimacy at scale, extracts household savings running into thousands of crores every single year and is structured to allow the proceeds to be moved offshore before meaningful enforcement can catch up.
What is marketed as financial ‘innovation' on the surface, artificial intelligence (AI) bots, foreign exchange (forex) and virtual data assistant (VDA) dashboards, NFTs, and online education packages, is, in case after case, a repeatable recruitment-and-recycling model: quick to launch, quicker to rebrand, and effectively able to stay ahead of Indian enforcement while victims struggle with the most basic step, getting an FIR (first information report) registered.
Fresh internal data from Strategy India's STAB division Shows just how fast the machine is accelerating: 53 new MLM (multi-level marketing) scams were detected and flagged in 2012, 450 in 2013 and 548 in 2014, before the graph jumps again to 387 in 2019 and 429 in 2024. In 2025, the curve turns almost vertical, with 841 new MLM scams starting in that single year. The names change and the marketing gloss improves, but the pattern feels eerily familiar.
Over the past two decades, the Indian public has witnessed repeated waves of operations that deploy MLM compensation plans ranging from One Coin and Gain Bitcoin to Aryarup Tourism/ATCR, TVI Express, Pearlvine, Speak Asia, Social Trade, Torres, Stock Guru, Ram Survey, FX Stock, iX Global, Bot Bro, Oris Teams and thousands of similar variants.
These schemes are typically positioned as the ‘next big revolution’ in direct selling, surveys, holiday packages, virtual digital assets, or ‘financial education’ or ‘trading’ in stocks, crypto, VDAs, estate and forex. At the same time, their underlying economics are driven primarily by the recruitment and circulation of participant funds rather than genuine retail demand, unlike in the sustainable direct selling MLM operations.
At Strategy India, we detect and track, on average, around 20 new MLM-style operations launching in India every week (since 2007). We collect data, analyse the MLM compensation plans, and flag three recurring risk buckets: (1) mathematically unviable payout models that only ‘work’ if fresh money keeps coming in (Ponzi / money-circulation mechanics), (2) unregistered collective investment schemes, and (3) operations pushing deceptive claims in official literature online or offline.
The intent has always been simple: give the public a live ‘do-not-touch’ list to save money, goodwill and energy. In our experience, a significant number of the MLMs we flagged early have later appeared on Securities and Exchange Board of India’s (SEBI’s) alert lists, often after avoidable harm has already been done.
Every cycle teaches the scam ecosystem what works best: copy the ranks and jargon of legitimate direct selling MLM operations, bolt on a ‘game-changing’ product story and pay the most aggressive promoters the highest bonuses.
In the current generation, the sales pitches are far more sophisticated. Five per cent a month is advertised as a conservative return; 25% is sold as realistic if investors ‘let the AI and forex bots work’ and stay invested and keep adding funds for compound returns. Virtual digital assets, with or without real blockchains; NFTs; algorithmic forex trading dashboards; AI automation; and ‘exclusive online education packages’ are woven together to create a sense of inevitability and technical depth. Underneath, the economics are still driven primarily by recruitment and reinvestment rather than genuine customers buying a product.
The fundamental shift is in who controls these schemes. A growing number of India-facing Ponzi MLMs appear to be orchestrated from Dubai, where promoters who once faced proceedings in India can operate at arm's length. There, they can plug into a complete ecosystem: software developers to clone websites and apps on demand, marcom teams to design glossy brands and webinars, crypto advisers to mint and list new tokens, lawyers to build layered shell-company structures and hawala and mule networks with efficient reach back into India. Financial advisers then help rotate and layer the pooled funds through Unietd Arab Emirates (UAE)-linked entities into real estate and other assets around the world, often split between hard-cash deals, trade-based settlements and crypto holdings, routed through obfuscation techniques such as mixers and tumblers. And importantly, if and when enforcement catches up, they have a ready panel of advocates experienced in defending Ponzi MLMs, moving quickly on anticipatory bail, quashing petitions, jurisdiction challenges, ‘product’ narratives, and procedural objections, buying time and creating legal friction even as victims struggle to register an FIR with specialised units of police like economic offences wing (EOW).
"841 new MLM Ponzi schemes were launched in India in 2025 alone. That's 2.3 per day."
On the ground in India, the script is brutally simple. Ordinary families are told that a modest monthly commitment and a small downline of recruits will put them on the road to 'time and financial freedom'. Early payouts are showcased to build social proof. When withdrawals slow or stop, victims are told that the 'real' opportunity is the subsequent launch of another coin trading/staking, another AI bot, another help or donation plan and that their old losses can be recovered if they show loyalty and bring in fresh investors. By the time the music stops, the operators have already rebranded, relaunched and, in many cases, relocated.
For policy-makers, regulators and financial institutions, this is no longer a story about a handful of bad actors on phone, WhatsApp and Telegram. With hundreds of new MLM scams (money circulation and unregistered collective investment schemes (CIS)) starting and operating under the radar in a single year, built on multilevel marketing-style compensation plans and plugged into international hawala or feiqian (flying cash) and crypto channels, it has become a structural issue of capital flight, tax leakage and public trust in India's financial system and the direct selling MLM industry.
In 2023, our recommendation to the department of consumer affairs (which published the Consumer Protection (Direct Selling) Rules, 2021) included setting up a standing monitoring-and-action committee. The brief is straightforward: detect and collate data, analyse and flag high-risk operations and issue reasoned weekly reports to economic offences wings (EOWs), cyber-crime units and FIU-IND so enforcement can act early, before the fraudsters reach scale.
What has changed is that India now has a clearer compliance choke-point in the VDA layer: the FIU-IND guidelines push VDA service-providers toward end-to-end traceability through the travel rule, tighter controls on transfers to/from unhosted wallets, and explicit resistance to mixer/tumbler-style obfuscation. On paper, that's real teeth because it targets the exact rails Ponzi-MLMs use to move and launder value. The bottleneck is still speed and coordination: if enforcement and asset-freezing don't move in days (not months), the scam cycle will outrun the rulebook.
The more serious question is whether the scale and persistence of these Ponzi/ unregistered CIS MLM schemes, reportedly operated from hubs like Dubai, also intersect with the strategic interests of hostile foreign actors especially China, by gradually weakening public trust in India's financial and regulatory systems.
The uncomfortable bottom-line is this: when 841 new Ponzi MLM schemes can surface in a single year, the issue stops being 'fraud awareness' and becomes a governance problem: capital flight, tax leakage and erosion of trust in the very nstitutions meant to protect citizens.
India now has stronger rails on paper, especially in the VDA layer, but unless early detection, swift inter-agency action and time-critical asset freezing become routine (not exceptional), the offshore-controlled playbook will keep winning by speed.
The choice is stark: build an effective system that moves faster than the scam cycle, or accept a permanent two-tier reality where operators buy time to float new MLM scams while victims spend years fighting for the first FIR.
(Pranjal R Daniel is Chief Strategist, Strategy India (Direct Selling MLM Consulting) | He has been in the direct selling MLM industry for over 26 years with a data-backed record of analysing over 15,500 MLM operations in India.)
All the MLMs listed above were detected, analysed, and documented in Strategy India's MLM Scam Alerts within weeks of their launch in India. 
