Anyone who is on Instagram, YouTube, Facebook or TikTok often comes across offers that sound tempting: from weight loss powder to lucrative investments. In our series, reporter Judith Henke takes a look at these products. What is behind it, how serious are you?
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A man with short brown hair is standing in front of a large car. Leaning slightly in front, he crosses his arms and beams at the camera. He uploaded the photo to his Instagram page, which is followed by more than 383,000 people.
He writes: “As a child, I always told my parents that I would drive a Porsche when I was thirty. Now I’m 26 and have three Porsches.”
Patrick Valentini, that’s the name of the proud Porsche owner, and I probably had the same childhood dream. But unlike me, he fulfilled it – how did he do it?
The influencer does not answer my questions. But I get a possible answer in a video that a resourceful reader sent me. It was uploaded to a website called “network-successful” and in the imprint is a company called “Patrick Valentini Inc” based in the USA.
In the video, a young man explains to his viewers how a new cryptocurrency works: it’s called PLC Ultima and apparently it’s easy to make money with it.
But explaining how this currency works is anything but simple. If you want to understand what this is all about, you first have to understand how the most well-known cryptocurrency – Bitcoin – works.
Unfortunately, the nice gentleman in the video doesn’t explain that – so I’ll take it over quickly: Bitcoin is considered an alternative to our fiat money system.
For example, while the euro is circulated by the European Central Bank, bitcoin is a decentralized currency. It is generated by mining, i.e. by data centers that are operated by private individuals or companies around the world.
Bitcoin balances and transactions are managed in a decentralized network – in a blockchain. This is a kind of chain of consecutively stored data sets that can be continuously expanded.
Anyone participating in a blockchain system stores a full copy of the data on their compute node. This increases the security against counterfeiting.
Because if a user changes data on his computer, other participants in the network can uncover this manipulation. To do this, the data must be compared with the other copies distributed in the network.
When two parties complete a transaction, it is published in a block with other upcoming deals. This is sent to the network of computers participating in the blockchain.
The Bitcoin network requires a very high level of computing power – not to check the transactions, but to calculate the next block. This is the task of the miners. The reason for this is that this is the only way to keep the number of newly created Bitcoin low and to limit the supply of new Bitcoins.
The bitcoin miners are rewarded for their effort by being allocated a certain number of bitcoins. The computing power for mining is now so high that individuals can no longer mine bitcoins on normal computers.
Why am I explaining this in such detail? Because this is exactly where PLC Ultima comes in with its marketing strategy. The promise: Unlike Bitcoin, anyone could create new coins, simply on their smartphone. The principle behind it is called “Minting.”
Anyone who wants to get into the PLCU business, which is advertised as so lucrative, simply has to download two smartphone apps: one app that stores the coins and one app that calls itself “Farm”.
In addition, the user must buy a “Minter”. This entitles him to mine coins. It’s not exactly cheap: the price is at least 110 euros, but if you want to mine more coins, you can also dig deeper into your pocket and pay up to 550,000 euros.
And before the “Minten” can really get going, the user has to make another investment – because he has to buy a PLCU in advance and “plant it” in the farm app. It’s then frozen there for at least a year.
A certain sum of PLCUs, which was contractually agreed beforehand, is now automatically generated every month. At the end of the year, the user then receives back a multiple of the implanted PLCU.
For example, if you want to plant a PLCU, you pay 5,500 euros at the beginning plus the costs for the first coin that is frozen.
Last week the price was at times around 7,700 euros. According to the video presentation, the “farm” generates 0.4708 PLCUs per month – after twelve months that is around 5.64 PLCU – i.e. around 43,501 euros. After deducting the investment in the “Minter”, that’s a profit of almost 38,000 euros.
That’s almost too good to be true. So what’s the catch? I’m going to ask someone who is well versed in cryptocurrencies: Philipp Sandner, founder of the Blockchain Center at the Frankfurt School of Finance
In addition to the sales story – coins digging via smartphone and a high profit without much effort – makes him skeptical that the PLCU is not traded on any larger crypto exchanges or those regulated by the German Financial Supervisory Authority (Bafin).
According to website Coinmarketcap, PLCUs are tradable on 11 crypto exchanges. A look at one of the exchanges, Coinsbit, shows that quite a few people seem to be trading the coin, with the trading volume on Monday afternoon being around $900,000. At the same time, bids in the order book totaled just over $6,200.
These numbers are important: I can tell how liquid the coin is – i.e. how quickly a buyer can be found if I want to get rid of my PLCUs quickly. On Coinmarketcap I can even sort the exchanges where PLCU is tradable by liquidity.
What strikes me: The order of the exchanges sorted by liquidity is different than when I sort them by trading volume. Actually, the order should be the same – because the higher the trading volume, the higher the liquidity, as a rule.
I guess I’m not the only one who views the PLCU’s trading moves with skepticism. An anonymous Twitter user also seems to have had the PLCU on their screen for a long time. He posted some screenshots.
Including one showing PLCU’s price abruptly drop nearly 100 percent after trading volume jumped to 36 PLCU.
Another screenshot shows: At times, potential buyers seem to attach little value to the coin. Because at the time of recording, the purchase bids for all coins add up to an amount that is even below the value of a single PLCU.
So does that mean that PLCU’s liquidity is not as high as it first appears? According to crypto expert Philipp Sandner, much of what I have found indicates that PLCU is not an organic project, but that “they are trying to steer the project to show success – which in turn is positive for investors works.”
I confront the companies behind PLCU with these suspicions. I get an answer from Platin World, based on the island nation of St. Vincent and the Grenadines. “The company does not intervene in trading on the stock exchanges,” the letter said.
The liquidity of the coin is available. Platin World also addresses the other allegations: The PLC Ultima is indeed listed on some top exchanges and is working on placing the coin on even better-known exchanges, including Binance.
In addition, the company attaches importance to the fact that the PLC Ultima is not an investment, instead the companies around the coin would create “technical solutions”, including the PLC Ultima Farm. They require less computing and power capacity than Bitcoin – I don’t find out exactly why. But what the company tells me: The coins could be used to buy Amazon vouchers or cars, for example.
So everything is fine? I’m not entirely reassured by the company’s response. Because more than a year ago, another cryptocurrency was also heavily criticized, investor protectors warned against it. Your name: Platincoin.
It worked on a very similar principle to the PLCU – even the word “minting” was already used in this project. Is the PLCU the successor to the Platincoin?
Several indicators point to this. For one thing, the mind behind both projects is the same: Alex Reinhardt. He is the face of currencies and vigorously beats the advertising drum on social media such as YouTube or Telegram.
But the many companies that are listed in the imprint for the various PLCU apps and websites cannot be traced back directly to him.
Instead, my research, during which I enter the companies from the PLCU environment in various commercial registers, sends me around the world: to Cyprus, Georgia, the Caribbean state of St. Vincent and the Grenadines, Hong Kong and Dubai. According to the letter I received from Platin World – the company on the Caribbean island – PLCU wants to position itself globally.
But: The locations are in states that are known for many things – just not for their transparency and tax requirements for companies.
That is why lawyers there also earn good money by opening companies for entrepreneurs from other countries. My research also leads me to such lawyers again and again, for example in Cyprus.
That’s not surprising – but that some of the companies have already been used for Platincoin. A fresh start would probably not have harmed the PLCU: Because the Platincoin has not only fallen from over four euros to almost 50 cents, it has also attracted the attention of the German financial market supervisory authority BaFin.
At the end of 2018, she pointed out that Platin Genesis DMCC was not authorized to conduct banking business or provide financial services.
And Stiftung Warentest has also put Platincoin on the “Investment Warning List”. It is said that the crypto system is a “windy direct sales concept”.
Renate Daum, editor at Stiftung Warentest, who analyzes investment offers for the magazine “Finanztest”, has now also looked at the PLCU for me. Their conclusion: “There are many indications that PLCU is a successor to Platincoin.”
A suspicion that the company that answers my questions doesn’t really deny. Instead, the letter complains to me of its suffering: Because of the pandemic, the “complex corporate planning” could not have continued as planned. Therefore, an alternative was created: the PLC Ultima system.
The letter also addresses the BaFin warning: Platincoin does not offer investment products, but software products. BaFin misinterpreted that.
Similar to Platincoin, PLCU works with a distribution system. In the sales video, in which I first found out about the existence of the cryptocurrency, this possibility is even openly addressed: “You don’t have to own a farm at all, you don’t have to be invested at all if you want to make money with us”, so the seller in the video.
There’s also a customer referral program — with what he calls a “compensation plan on steroids.” A salesperson receives 20 percent for each newly acquired customer – and if this new customer wins customers again, the salesperson also receives a commission.
There are even different sales levels that customers can reach – then even higher commissions beckon.
A cryptocurrency that wants to be known with a distribution system? The Hamburg consumer advice center warns of PLC Ultima after looking at the business model for me.
“It’s very reminiscent of a Ponzi scheme,” says Sandra Klug, an investment expert at the Hamburg Consumer Advice Center. If there were not enough buyers for the “Minter” and the coins, the system would collapse.
It would then be difficult for investors to assert legal claims, since the companies responsible would be based abroad. “The complicated company structure, with headquarters in typical tax havens, should already ring alarm bells.”
Ponzi schemes are forbidden in Germany – and for good reason: At the top of such a system is the initiator who introduces a product.
It can be anything: from a supposedly innovative kitchen appliance to a supposedly promising financial investment. In principle, the product doesn’t matter because the focus is not on selling it, but on recruiting new partners.
Because the initiator works together with sales people. Their task: to acquire new customers, who in turn acquire new customers. In order to become part of the system, new customers pay a kind of start-up fee – this can, for example, be an investment in the allegedly high-yield financial product advertised.
But the customers don’t make any profits because the investments are going so well, but because more and more new customers are paying into the system.
This works as long as the membership numbers grow. But when the number of new customers stagnates, the vast majority of customers lose their invested money.
But does this description also apply to PLC Ultima? According to the letter I received in response to my questions, no. “The company states clearly and unequivocally that under no circumstances will it use funds from new customers to satisfy claims from existing customers,” it said.
Sales are not mandatory for customers who have decided to rely on PLCU. In addition, direct sales are advantageous “for global accessibility and the potential for personal advice for interested parties.”
It seems that Alex Reinhardt, the mastermind behind PLC Ultima and Platincoin, is a proponent of distribution schemes.
Because during my research in various crypto forums, I came across pictures that suggest that Reinhardt was already involved in the sale of Swisscoin – a cryptocurrency that several supervisory authorities and the Stiftung Warentest warned against.
According to the reply letter from the company behind PLC Ultima, Alex Reinhardt only worked there for a short time and left Swisscoin after realizing that the system was not compatible with his own ideas.
His past does not seem to deter many potential investors: the Telegram group “PLC Ultima DEUTSCH” alone has more than 45,000 subscribers.
News was recently announced there: The “Minter” should only be available for a short time, but a successor product is already in the starting blocks: the Ultima X Minter, with which the coin PLCU X can be generated.
According to a press release published online, it is only suitable for “farming” within the “PLC Ultima Community.” It can be “multiplied quickly and very strongly” – and then exchanged for PLCU.
It doesn’t matter whether it’s lucrative investments, dental splints or coaching offers: anyone who uses social media is overwhelmed with product recommendations. What’s behind it? How serous are they? You can find out in our podcast “Die Netzcheckerin”. Subscribe to Spotify, Apple Podcasts, Deezer, Amazon Music or directly via RSS feed.
