A wolf in sheep's clothing?

I received a message from a cousin this morning and he eagerly shared with me an opportunity to invest in a great company, that will be the Alipay of Malaysia. I had known him well as we grew up together and he has been a very honest person, so I patiently listened to all his voice recording on my whatsapp...wow, the company is going for IPO on AIM, London Stock Exchange (as usual, I am still not excited with all the juicy story). 


I then text him asking for the company website so that I could take a closer look. From the domain name, I can sense something fishy - the website has a totally different name from the company and the webpage looks like a kids' game page. True enough, nothing much can be found on the website - none of these are listed- product/service, management team or corporate news. You need to be a member to login. I worried he got into some funny scam, so I decided to search for more info online.


Yes, there were some video on Youtube on their launch of new corporate name, the CEO spoke about vision and mission and how all members can "see their present from the future". It is getting clearer to me, its MLM related. It claims it is a financial education & learning platform . Then the introduction of crypto-currency and e-payment platform to categorise the company as a fintech company ( I suppose this is the story used for AIM listing) . However, when I get into more details of how members earn their "commission/bonus" or point/etc, it is not so clear. The company has also a share scheme in place with price available to members for buy/sell purpose. What I learnt was that there are lots of restriction and high admin charges when a member wishes to transact/ convert points to cash. I further checked at Bank Negara's website on "blacklisted" companies that may be involved in unauthorised deposit taking/etc, bingo!! the name is there. Is this a wolf in sheep's clothing?  


I have reverted to him on my concern and advise him to get back all the capital first whenever he could. Well, as expected, his response is "an outsider who do not understand the business always wont believe how much money can be made" from this opportunity and show me how many merchants have signed up to accept the crypto currency, how much was credited in his e-account, the IPO. I see he has no intention to bullshit me but I doubt he fully understood how the company can pay them so much when it is such a young company with no real revenue yet.


A scam will only collapse when there is no more fresh "money" flowing in. We knew so many Ponzi schemes/ money game companies every where in the world that can last many years, even in advanced country like US has the largest Ponzi scheme (Madoff case) lasted so many years, with big financial institutions and well educated professionals have fallen victim too. 


I am saddened by the news  that people I know lost their hard earned money to this kind of scam. No doubt greed is the main driver but being ignorant could be the reason for those not so well educated group.


On a separate note, I always remind myself, do not be over confident on my own stock analysis/ pick and take a second level thought when there is contradictory view by others. Try to step back and be a little objective, do I really know something that the market is not aware yet, hence not factored into the price yet? Sometimes we can be blinded by our over-confidence...yes, one needs humility on the investment journey.