Leh Minh Tam, CEO of Sky Mining, based in Ho Chi Minh City, apparently fled the country after the company suffered heavy losses. The company owned several cryptocurrency mining farms throughout Vietnam, but they have become largely unprofitable due to the increasing difficulty of extraction and the stagnation of the prices of virtual currencies.
The company was founded in March and claims to operate mining platforms in 26 locations throughout the country. The mining contracts, which range from US $ 100 to US $ 5,000, were sold to investors, with the assumption that they would earn their investment again in 12 months.
However, investors were also offered commissions to promote and recommend others to join the company, and the contracts were also sold with the promise that they could triple their investment in just one year.
This casts serious doubts on the company's business practices, considering that many pyramid and Ponzi schemes also offer high-yield investment plans along with a generous commission to recommend friends and family to invest in the plan.
There have been many pyramid schemes based on cryptocurrencies, such as BitConnect, in the past, and this could be just another example, presented in a different form.
Sky Mining Vice President Le Minh Hieu has formed a temporary meeting of 16 people to liquidate the company's remaining assets in an effort to reimburse investors. He states that Tam, the CEO, had run away with most of the company's money.
The main office of Sky Mining is currently closed, while the whereabouts of 600 mining platforms that were stored in a nearby facility is currently unknown. Witnesses say they were abducted by a group of people posing as maintenance workers, which angered many investors.
Tam published in a Facebook group only for investors, apologizing for their actions, but justifying them, since mining had stopped being profitable and had no other option. He explained that he had been slowly selling the assets of the company in order to pay investors constantly and not raise suspicions. However, he was forced to flee the country, as he ran out of options, and would remain hidden from the public to protect his life.
The total amount invested in the company amounts to US $ 35 million. A group of 20 investors has already filed a fraud claim with the local police, while other individual lawsuits have also been filed against the company and against Tam.