The Bhutanese Leading the way.
In the recent past whenever questions arose about the Puth Group, some people online put up a 26 January 2024 e-commerce license of a man named Phuntsho Wangdi to give the scheme an air of legitimacy.
The Bhutanese tracked down Phuntsho Wangdi who is based in Thimphu and asked him about the now outlawed scheme and his license.
Phuntsho said that he took out the license at the direction of a ‘Canadian citizen’ named ‘Chris’ in Colorado, USA where the ‘Puth Group’ is based.
The full name of the group is ‘Puth Group E-Commerce Co Limited’ and is said to be owned by a Daniel Craig Bartel and has an address given as Albiene Street, Commerce City in Colorado.
How Puth works
Phuntsho along with Chris, some ‘Puth management’ and mainly Bhutanese members make up a 1,000 strong Telegram group.
The Puth Group does not have any online literature or website but Phuntsho said that members who get recruited by earlier members get a link which takes them to an app that they have to download.
Phuntsho said the minimal fee to join is USD 50 which they pay to a Bhutanese ‘agent’ which Phuntsho says there are around 10 in Bhutan appointed by Puth.
These agents take the money and release what is claimed to be ‘USDT crypto coins’ of the same value into the app of the member.
The Bhutanese found that USD 50 is only the entry level and if you want to be in level 1 the amount to be paid is USD 80, for level 2 it is USD 240 and for level 3 it is USD 720.
When asked how members can start making money Phuntsho said that there are two ways.
He said one is to do with ‘e-commerce’ whereby based on your membership fee you are given online sale items to rate every day and you are supposed to give good ratings.
He claimed the good ratings helped the product improve its online ratings in place like Amazon and for this you get a 0.06% return on your investment.
However, here this is contested by insiders who say only ‘products are released’ and there is nothing much beyond that.
He said the other way to make money is to recruit members and here you get a percentage of the money invested by the new recruit as commission.
Phuntsho said he paid USD 50 and earned USD 150 in three months.
While Phuntsho tried to stress the rating side as making the money the real money where people make returns is on recruiting more members.
If you recruit a person then you get a 6% commission, and if your recruit recruits anyone then you get a 4% commission and if your recruit’s recruit gets a new member then you still get a 2% commission.
This means that for any person investing a sum to join the scheme around 12% is given in commissions to various levels of recruiters.
Phuntsho said the Puth Group avoids using banks as it uses the USDT (Tether) crypto coins which are equivalent to the dollar. The USDT coins unlike money cannot be regulated by the authorities and the Central Bank.
To ensure that money keeps coming in and does not go out easily and also to also enable the organizers to earn extra money the Puth group charges a withdrawal fee of 5% for USDT 7 to 300 and 3% for withdrawal of USDT 301 to 500 and 2% charge from USDT 501 to USDT 999. There is no withdrawal fee above USDT 10,000.
Crypto wallet
On the Reddit, social media site a Bhutanese by the nick name talk_fast_rap who says he is from the IT sector said, “I went on to track the wallet address (crypto wallet) of the site ( which seemed to change in a few days) and it already had received like 6000 transactions and had around 6 lakh USDT. It had just been 42 hours that the new wallet was created. No wonder our foreign deposits are draining.”
He also said, “It does not provide freedom for you to do things on the site, it has to be verified by the ‘admin’ and only after their approval do you level up or have the amount withdrawn.”
He also said that he even knows of instances where people in government offices and corporate offices are advertising to their walk in visiting clients to join the Puth group using their referral code.
There is first a question mark if the USDT is real or if the Bhutanese account holders have real control over it if it is real.
By common sense logic one should be able to sell USDT to anyone in the world but the Puth Group mandates that it be sold to only its agents. The fact that approval is required for withdrawal also raises questions over the legitimacy or control of the crypto wallet.
The Bhutanese asked Phuntsho how the agents had acquired USDT and he said it was by people who had been mining before and also through Bhutanese in Australia who had sold the USDT.
The Puth Group has a hierarchy of Captains and Vice Captains and above them sits regional manager from outside who manage Asia.
Phuntsho claimed that the money does not leave the country but this is not easy to verify if crypto currency is involved as it can be transferred easily anywhere in the world.
False assurances
In the Telegram group an account known as Royalbubu reassured the members that they had a meeting with the Ministry of Industry, Commerce and Employment and that the government wants to support Puth.
It said, “There are no bad comments and the government is ready to support us.”
It said the government wants a presentation on the system. It also informed the group that their manager informed them to conduct charity activities in the health department again.
The next messages are pictures of a group of Bhutanese Puth members holding a Puth Group logo and donating various items. The charity work was to gain legitimacy for Puth.
One more message on the group is showing how much others are earning and encouraging new members to join and also upgrade.
In a message on Telegram dated 15th April 2024 it says, “the Bhutanese license holder (Phuntsho), me, one of the senior captain from Tsirang and officials from the ministry of industry and commerce had a meeting regarding the Bhutanese license of PT company and they were supportive to the Puth group.”
It said Bhutanese are earning from PT platform and they discussed how PT platforms works and finally the officials decided to hold an online conference with Puth group higher officials.
It said, “Today’s meeting has been concluded by Mr. Chris by saying the matter was settled once and for all, the decision was that if there is a meeting now, we will do it in writing. In order to express Puth’s sincerity to the Bhutanese government, we will send two mangers to arrive in advance during September-October. I (Chris) will also arrive in Bhutan in December.”
However, the reality is that the Puth License held by Phuntsho was cancelled 10 days ago and the entire scheme has been declared as being illegal on 8 May 2024.
Puth and Pyramid schemes of the past
In the experience of this paper reporting on similar schemes in the past like Enagic, Q-Net and Tall Win this is not only a Pyramid scheme as it does not have any product and so is likely a Ponzi scheme that will grow exponentially to benefit a few top members or recruiters, but will collapse once it cannot recruit new members causing huge losses down the line to the majority of ‘investors.’
Also like other schemes before it, the Puth Group members are in a cult like organization where facts and even legal notifications do not matter and those pointing to the facts are seen as being ‘jealous,’ or out to hurt them.
The strongest Bhutanese defenders of the scheme as seen in online comments are either those who are on the top and making the most money or those who have recently joined and are anxious they will lose their money.
The Puth Group scheme like others before it does not have an open website but like Pyramid schemes before it, it requires invitation.
There is no real product but members rate and release products when there is no such business model that exists online where you can earn money for rating products.
The main give away is the commission one earns on recruiting new members which is the main feature of Pyramid and Ponzi schemes.
However, like any Pyramid or Ponzi scheme it hooks members by giving a higher return which is nothing more than a part of the money of new members who in turn will get money by hooking more new members. The main chunk of the money is kept by the organizers of the scheme. The scheme will keep running as more and more join and will ultimately collapse when no new members join to keep up the payments.
While Puth is just another Pyramid/Ponzi scheme it has repackaged itself by disguising itself as an E-Commerce company which it is not. Its clever use of Crypto also allows it to bypass financial systems checks.
CCAA acts
While Puth managers and members have been assuring of government support, Phuntsho first got a letter from the Competition and Consumer Affairs Authority (CCAA) on 8th May saying the business model of the Puth Group is a pyramid scheme and asking him to stop the operation and promotion of the scheme.
Shortly after that the CCAA issued a public notification on its Facebook page saying that the Puth Group scheme is a pyramid scheme which predominantly focuses on continuous recruitment of new members rather than promotion and marketing of products or services.
It said schemes are designed to deceive people, are fundamentally unsustainable and prone to eventual collapse, thereby leaving members without the promised return on investment.
An official from the CCAA said a matter of concern and potential risk is that the Puth Group has taken the CID number and bank account numbers of its members which could result in problems in the future.
The official said the assumption is that the activities will be stopped now and if that does not happen then legal prosecution will begin.
