New is not gold
Just when this gold investment scheme call DEET started to gain more public attention, DEET (aka Dinar Edaran Emas Trading) was placed on the BNM FCA (financial consumer alert) watch list on 29 Sept 2022. Companies in the FCA list is basically the regulators (SC) warning public to be careful when dealing with the company but it's not outright calling the company a scam.
I got to know about this mainly from famous personal finance writer and property investor Tuan Azizi Ali who 1st exposed scheme on his Tiktok channel.
This gold investment scheme is not common among Chinese and English speaking citizens in Malaysia, it's more known among the Malay Muslim community.
The company promises a 3% daily (pls read again) returns to investors which they term has Hibah. Hibah refers to a gift in Islamic finance which is kind of a profit rate. The 3% doesn't look like a big figure but from a daily returns perspective it is unusually high as bank interest rates are only 3% per year (aka per annum). It's also strange that given that the investment instrument behind the scheme is gold which does not pay any dividends/interest/profit, how does the company generate such returns to the investor ?
The narrative given by the company is the company buys gold direct from the gold mines and is able to pass down the savings to the investors but it still doesn't explain how the company generates the daily returns given that gold prices goes up and down and is currently at 1 year lows (2022).
The investment scheme has several red flags in that there are the usual MLM upline/sponsor reward scheme (up to 10%). The dinar gold that is purchased are not in physical form and are all just a bunch of digitally recorded fractional amount in the app dashboard.
I'm wondering why payments are done in USDT, a commonly used crypto stable coin favored by gambling and scam sites. USDT is a crypto currency that is tied to the price of US dollar.
I'm quite sure this scheme is not even Shariah compliant as the investors do not seem to be redeeming physical gold and the company does not have poof of holdings of the physical gold. In addition these types of investment scheme requires Securities Commission approval to operate and this is nowhere to be seen at their website and promotional video description. Many naรฏve people have forgotten about the last Genneva gold investment scheme collapse where many retirees and newbies got their retirement savings wiped out. Deet also reminds me of the JJTPR (่งฃๆๆฎ้ไบบ) scam of the past where its founders were very charismatic, charming and talk very convincing, never shy to show their face and even go on live television. The founders also put up purported roadmap to expand to Indonesia to make the company sound more legit.
There are many legal options for buying gold like Hellogold, Public Bank,Maybank GIA etc and the only reason why people fall for these gold investment schemes (scams) is due to greed. Many of the roboadvisors (Wahed Invest, Versa) today have thematic portfolio which buys into gold ETF with minimum investment of just RM100. Gold is definitely a hedge against inflation but getting on board a legitimate site is also very important.
3 facts about gold invesring that I always keep to heart :
- Gold does not pay dividends, it's an inflation hedge
- Gold needs to be purchased physically format in order to be Shariah Compliant
- Nobody got rich just buying gold unless it's a business, gold is just used to store value
Updates 2022-12-19
I got to know that the DEET offices has closed down and all the uplines of the scheme have fled. Withdrawals also have been blocked. There's it goes, another dubious gold investment company bites the dust.
Updates 2023-1-10
Apparently the people behind DEET has rebooted the scam in the form of Seri Dinar, a new gold investment based scam similar to DEET.
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