Man snapped with Prime Minister labelled Ponzi scheme affiliate, denies claims

UPDATED with clarification • On 5 October 2017, MaltaToday published a right of reply for Michael Mathias denying the claims. The reply is presented in full hereunder.

A meeting last month between Prime Minister Joseph Muscat and the chief executive officer of a cryptocurrency company has raised alarm bells, amid claims that the man – Michael Mathias – is a wellknown affiliate of OneCoin, one of the most notorious Ponzi schemes in cryptocurrencies.

Mathias uploaded a photo of him shaking hands with Muscat, saying, “The CEO of DAScoin Michael Mathias had a great meeting with Joseph Muscat the PM of Malta. We will be collaborating with the Malta government in the future”.

DAScoin is an offshoot of OneCoin and claims to be utilising a novel blockchain technology, making it the most secure yet. However, the company has not yet released any product, although it had vowed to do so by March this year.

The post attracted a lot of attention by a number of experts and commentators, who wondered why Muscat would meet Mathias, despite the Maltese government’s commitment to embracing cryptocurrencies and blockchain in a national strategy.

One site dedicated to investigating and reporting on the legality of multi-level marketing (MLM) schemes – also called pyramid selling, network marketing, and referral marketing – described the whole thing as a “blatant attempt at legitimacy by association”.

Behindmlm.com noted that one of the lesser-known MLM Ponzi points schemes making the rounds – Net Leaders – is hitched to DAScoin, having initially launched as Coin Leaders last year. Net Leaders affiliates invest in DAScoin points on the typical “we’re gunna be the next bitcoin!” promises.

“Net Leaders is your typical Ponzi points scheme. DAScoins to date are not publicly tradeable and are completely worthless outside of the Net Leaders MLM opportunity,” the site said.

“In what appears to be a blatant attempt at legitimacy by association, last week Net Leader affiliates began claiming future collaboration with the Maltese government.”

The site said that the logic behind these claims – being mainly parroted by Net Leaders affiliates – makes no sense, and insisted no government in the world was going to hitch their country’s economy to Ponzi points, on any level.

“That would be an economic disaster, which the Malta Financial Services Authority appears well aware of,” behindmlm.com said. “Far more likely this was just some event Michael Mathias gained (paid) access to, which included a photo-op.”

When you’re peddling Ponzi points it’s not like you can market on the legitimacy of the points themselves. And so, we have nonsense like this, which is based on little more than a photo of a handshake.”

Jonathan Galea, president of BitMalta, confirmed to MaltaToday that “Michael Mathias is an affiliate of OneCoin, one of the biggest crypto ponzi schemes”.

He said that the DAScoin project was being led by NetLeaders (previously known as Coin Leaders), and that the chairman of NetLeaders was John Pretto, one of the most active promoters of the OneCoin Ponzi scheme. 

“Additionally, the CEO of DAScoin is Michael Mathias, a wellknown OneCoin affiliate although it is unknown whether he is still involved in OneCoin or not,” BitMalta said in a statement. “Therefore, two infamous OneCoin backers are behind the DAScoin setup, which should already serve as enough red flags to send a bull into full frenzy.”

BitMalta went on to say that DAScoin’s claims were built on a pipe dream.

“The promised product is built on a private blockchain, and for something which is being touted and advertised as “the Bitcoin killer” and “the most secure cryptocurrency”, it is ridiculous to have something of that magnitude built on a private blockchain, unlike Bitcoin, which utilises a fully transparent public blockchain,” it said.

The group went on to slam DAScoin’s credentials and practices.

“Although MLM in itself is not necessarily illicit, it is often used for fraudulent purposes, as happens to be the case in DAScoin,” it said. “NetLeaders/Coin Leaders has laid out a seemingly-attractive investment scheme whereby the more one invests into DAScoin, the more one receives corresponding tokens, in a non-linear manner (another red flag).” In fact, original investors get a hefty bonus once a certain number of referrals are accumulated in order to encourage other people to join in the scheme.

“What makes this project stand out as a scam is that the value of DAScoin is centrally assigned by the people behind DAScoin themselves, which means that the value of DAScoin is pegged to nothing more than the rate of investment from NetLeaders affiliates,” BitMalta said.

RIGHT OF REPLY

I refer to the article published on the 18th September 2017 (Man snapped with Prime Minister labelled Ponzi scheme affiliate), with a view to drawing attention to the false information which was published in the article.

I feel extremely aggrieved by this defamatory article about my business and me. Predominantly due to the fact that, prior to the article being published, no attempts were made to contact me in order to comment on the claims and accusations made by the cited two sources, i.e., BitMalta and Behindmlm.com, the latter of which appears to be an anonymously-owned website identified only by its URL with seemingly no individual representation.

This modus operandi has resulted in an article which cannot be described as anything but fake news about me personally and my business, the most serious being that I knowingly promoted a Ponzi scheme (through Net Leaders) and that the DasCoin project is a scam. These are clearly very grave accusations which I consider to be an attack on my honour, dignity and reputation with far-reaching legal consequences for whoever is responsible for these false claims, ostensibly resulting from the fabrication and deliberate misinterpretation of a minor dealing with OneCoin as described further in this reply.

I have NEVER been a principal, partner, director, officer, employee and/or consultant of either OneCoin, or any company affiliated with OneCoin. Whilst I did purchase products from OneCoin (strictly as a customer), my first, last and only actual public interaction with OneCoin occurred in July of 2015 when, upon the invitation of a professional acquaintance, I took part in a discussion which lasted no more than 10 minutes, about the growth potential of the cryptocurrency industry, during a phone call announcing the launch of OneCoin in the US.

On the same day as the phone call in question, the fact that OneCoin was not in a position to make a FinCEN registration was brought to my attention and since this was a formality which I considered crucial to ensuring compliance with US laws and regulations, I decided that OneCoin was not a company I wanted to work with. Therefore I immediately moved on to pursuing potential solutions and developing my business elsewhere.

In due course, I founded DasCoin, with a view to bringing a cryptocurrency to market that offered a balance between decentralized and centralized elements. DasCoin is part of an entire ecosystem of solutions designed to unlock prosperity for millions of people around the world. It would appear from Mr Galea’s comments to MaltaToday that he is unable to fathom the possibility that there may be more than one type of blockchain which may not necessarily fit with his own preconceived ideas of what blockchain technology should comprise and has instead untruthfully labelled the DasCoin project as a scam.

DasCoin and OneCoin are and have always been, completely separate entities with absolutely no affiliation or connection or business association with each other. Consequently the statements in the article in question that “DasCoin is an offshoot of OneCoin”; that Michael Mathias is an affiliate of OneCoin, one of the biggest crypto Ponzi schemes”; are completely false with no factual basis whatsoever.

Contrary to the BitMalta’s allegations that “the company has not yet released any product, although it had vowed to do so by March this year” I confirm that the DasCoin actually did launch its blockchain as promised on 31st March 2017.

The only individual who has corroborated the content of this article is Mr Galea. Following the publication of a negative post about DasCoin on BitMalta’s blog, I reached out to Mr. Galea on two occasions in order to open a dialogue to address any queries and misunderstandings, however to date Mr. Galea has failed to respond to any of my invitations for an open dialogue.

As a final attempt to properly address the inaccuracies which have led to this response and in an effort to prevent the further spreading of false news regarding myself and DasCoin, I would like to renew my invitation to Mr. Jonathan Galea, to participate in a public debate on the matter (to which MaltaToday, together with any other interested media houses, would be invited).

As a tentative date I am proposing Tuesday 17th October at the Excelsior Hotel, Valletta at 3pm. This will provide Mr Galea with the platform to defend his statements in a public forum, an opportunity which Mr Galea would surely accept if he felt that there was any truth whatsoever to the various allegations made via BitMalta’s blog. If the date is not suitable, he may suggest two other alternative dates during the month of October. Mr Galea is in possession of my contact details and I hereby invite him to contact me in order to take this forward

Michael Mathias
CEO - DAScoin