As already explained in part I of our analysis on the Wachsende Werte crypto-investment scheme we would like to analyze and explain it in depths to show potential investors the risks associated with such an investment. One of the most important points for investors is, of course, the “Profit-Risk Distribution Scheme”. To be able to explain the Wachsende Werte scheme we registered with the system, communicated with their people and even made a guided tour in one of their Austrian mining facilities. Hence, our investigations and analysis are solely based on facts we gathered.
Let’s start with the crypto-hardware sale in this analysis:
- Initial Profit for Wachsende Werte: Wachsende Werte GmbH & Co KG is selling hardware to investors with an estimated gross profit of 30% to 50%, i.e. this gross profit is earned at the very beginning by the “for-profit” entity of the system. That’s a profitable business without any risks as Wachsende Werte GmbH & Co KG does not have the mining equipment at the time of investors’ payment. Only after they receive investor’s funds they purchase the equipment. According to the contracts, it may take up to two or three months until the crypto-mining equipment is delivered. And here is another interesting point – the decision which crypto-hardware to purchase is solely taken by Wachsende Werte! Hence, the investor must rely on Wachsende Werte GmbH & CO KG which offers room for more profits for them.
- No Earning Commitments: when signing the binding agreement with Wachsende Werte (it’s only binding on the investor’s side!) no commitment and/or information is given on the future mining returns (Par 5). That’s strange as Wachsende Werte do not commit to any crypto-equipment either. Investors’ are completely left in the dark. It’s just said in the agreement that the investor may have to sign a hosting contract with a partner (which is the schemes’ “non-for-profit” entity but this is not disclosed in the contract). From our point of view, those contracts are not legitimate and contradict consumer protection regulations in most jurisdictions.
- Preliminary Fazit: Without any commitment and/or obligation to sell a specific piece of crypto-mining hardware, investors pay the money to Wachsende Werte GmbH & Co KG. At this point, the schemes’ “for-profit” part is in the money and has no risks. They have investor’s money, have not yet purchased the crypto-equipment, and not even given a commitment or earning reference regarding the mining. The investor, on the other hand, has paid but has no crypto-equipment and maybe not even an idea which equipment he will receive. And no commitment regarding mining returns. The investor is in the risk.
In our next telegram, we will explain the mining structure which is even more interesting than the hardware part regarding the “Profit-Risk-Distribution” of the scheme. According to the tax consultants we involved in our investigations the structure with “for-profit” and “non-for-profit” may also cause some tax (VAT) issues.