New investment platforms are springing up every now and then. And the latest investment options for Nigeria right now is The LOOM platform. What Actually is this Loom Platform,how does it work, can it be trusted or is it just another well planned fraud scheme to loot the public.
In this article, we’ll talk about this investment platform base on the information we have gathered so far. It will then be left for you to decide if its safe to invest or not. It is however important to note that as at the time of writing this post, the Loom platform is paying its investors.
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What Is Loom Investment Platform
Loom investment platform is a peer to peer contribution platform that allows 8 persons to contribute money to one person. This means that when you first register in the platform, you are place in a circle of 8 persons(you and 7 other people) who will then pay one person(usually an old member).
Payment is made to you once you are able to bring in 2 new persons into the circle. Going by this calculation, it means that you can easily make hundreds of thousands within few hours if you invest wisely. You get paid according to your investment capital. For example, if you invest N10,000 8 persons will then pay you N10,000 in return making it a total of N80,000.
The ultimate question is, Is the Loom platform legit or just another fraud. To answer the question, lets start from the very beginning. Who are the brains behind Loom and is it a registered company.
Who Are The Owners Of Loom Investment Platform
As at the time of writing this article, there is no known owner of this platform. This means that the owners are either too scarred to come out or they have something up their sleeves. Truth be told,if the owners are very confident that the created investment platform is legit, why hide behind the shadows and operate from there.
Secondly, Loom is not a registered company in Nigeria which makes it very difficult to trust this platform. In real sense, the Federal government of Nigeria have no dealings with this platform. Hence joining and investing is strictly at personal risk.
Does Loom Have A Website
From how it operates, Loom does not have a registered website or hosting account. All transaction are done via WhatsApp group created by some Admin living where nobody truly knows.
There are few reasons why Loom can not operate using a website. One of such reason is that every domain name and hosting account seller have a KYC policy(Know your customer policy). This means that some basic details about persons will be required. Details like Names, house address, email, phone number etc.
With the above details, someone can easily be located when there is any issue of fraud from that domain name. To avoid such cases, its best they run the platform on WhatsApp group and that is what Loom is doing.When it collapse there is no one to be held responsible.
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Break Down Of How Loom Investment Operates
We’ll try our best to break it down in such a way that you get to understand how this platform operates.
Loom does not have a central bank account, which will be a mistake on their part, as tracking user will be easy. Instead they use a decentralized bank account details. This is how it works.
First you join a WhatsApp group, then you decide how much you want to invest. Minimum investment is placed at N500.
Secondly, some account number is given to you(presume to be that of old member who previously invested N500). You then make payment into this account details.
Then you refer 2 persons and another 8 persons will send N500 into your account. And the circle continues for all members.
Note:If you had invested N2,000 above, 8 persons will pay you N2,000. You get paid the initial capital by 8 persons.
Is Loom Platform Legit or Fraud
This is the ultimate question that needs an answer. For the following reasons we have come to conclude that the Platform should and can not be trusted
- No known owners or founders
- There is no website with details of persons
- They are not a registered company
- There is no buying and selling activity which does not make it a trading center.
- It does not have a good structure to last for a long time.
- Posses lots of traits associated with Ponzi schemes.
- Questionable mode of operations.
Why Loom Investment Platform Won’t Last Long
This investment platform won’t last long and for good reason we say so. From past experience, Peer to Peer donation and Pyramid platforms always get stuck at some point.
This new platform is not selling or buying anything. which leaves us with the first question, How did they manage to pay the first participant? Because it is obvious that one person started it, where did they get 8 Persons to pay the first investor?
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And if 8 persons paid the first investor it therefore means that they’ll need 64 persons to pay the 8 investors. Question now is, where did they get these 64 persons for starters.
What happens when more persons pay N1,000 and few persons pay N2,000. Does this mean that N2,000 get stuck or 16 Persons from N1,000 will be assigned to pay off the debt.
What happens if few persons invest N5,000 and more persons invest in N1,000. Will 40 persons be assigned from N1,000 to pay the N5,000 investor.
The Truth About Loom Investment
Our final verdict about Loom is that it is another Ponzi scheme like MMM, Twinkas, Ultimate Cycle and the rest. In truth, someone, somewhere is sitting down counting thousands of Naira as they drop into his account.
This new platform might have multiple account that they use in operating. This means that while you think you are paying another participant,you are actually paying into the account of an agent.
Our candid advice is invest wisely. Don’t throw too much into Loom as it won’t pay for a long time. Like every other Ponzi scheme we believe it will shut down even before you know it. So invest wisely and know how much you can lose.
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