DexNet is a controversial player in the crypto MLM sphere, led by CEO Aleksey Kedo, a known figure tied to previous fraudulent schemes. Kedo’s history includes heavy promotion of the Kairos Technologies Ponzi scheme, which collapsed after regulatory actions across Europe. Belarus authorities even made 30 related arrests in 2016. Though remnants of Kairos persisted until a failed ICO in early 2018, the association marked Kedo’s reputation with scandal.
Co-founder Igor Botnari is another notable name, known for a string of failed crypto ventures such as:
- FixOne: An inactive exchange with zero web traffic
- ProfixOne Capital: Disabled website
- FixOne International: Defunct trading scheme
- One Token: Failed Ponzi offering 65% annual returns
- Teroxx: No longer operational
- Abloxx: Token scam with promised 8% quarterly returns over five years
- Toqunia: Another abandoned crypto initiative
DexNet’s Web Presence and Traffic
DexNet operates through three domains:
- dexnet.one – Registered in February 2023
- dexnet.info – Registered in June 2023
- dexfreedom.com – Linked to a Seychelles-based shell company, Solutions Innovation, and registered in March 2023
By early 2024, traffic reports revealed the .ONE site received the most visits from Russia, Ukraine, and Germany. Meanwhile, the .INFO and .COM domains had significant traffic from Russia, Malaysia, and Latvia.
DexNet claims to function as “Dexnet Data Technology CO” in Dubai, an MLM hotspot due to lax enforcement on securities fraud. Its site also suggests protection under Sheikh Majid Rashid Al Mualla.
The Products and Business Model
DexNet’s core offering is a $1,499 Android-based device sold to the public, discounted to $999 for associates. These devices are used to mine XNET, a proprietary token. To incentivize investments, DexNet links higher returns to the number of devices connected online.
However, cashing out XNET is limited. Investors are pushed to commit their tokens to a “Revenue Sharing Pool,” with minimum participation starting at 500,000 XNET. This pool promises returns funded by a portion of new Android sales.
The recycled funds model and reliance on continuous new investments point to a classic Ponzi structure.
Commission Structure
The compensation plan focuses on retail sales and recruitment, offering:
- Direct Sales: 7% commission on Android box sales
- Binary Structure: Residual commissions based on a weaker binary team leg, capped at $15,000 daily
- Matching Bonuses: Paid through a unilevel structure, up to 10 levels deep, with a 1% match on residuals
To qualify, affiliates need to recruit at least two people. There’s also a $300 bonus for recruiting affiliates in the first month, capped at $1,500.
Dubious Product Value
DexNet’s Android boxes resemble modified T95Z media players, which are available for under $20 on sites like AliExpress. Even with added components like a 2 TB SSD, their $1,499 price tag is significantly inflated.
Legal and Financial Red Flags
By marketing investment opportunities linked to XNET and using funds from new buyers to pay returns, DexNet aligns with characteristics of an unregistered securities offering. This model also raises concerns of a Ponzi scheme, especially with mandatory reinvestment fees that don’t include a new device.
While DexNet touts its technology’s use of IPFS for data storage, this claim doesn’t mask its reliance on new affiliate investment.
Risks for Participants
DexNet’s sustainability hinges on recruitment. When new participants dwindle, payouts stop, and the scheme collapses. Like most Ponzi models, this leaves the majority of investors at a loss.
Dubai may overlook such activities, but global securities and anti-fraud regulations remain applicable.
Potential investors and users should be aware that DexNet exhibits clear hallmarks of a scam. The reliance on recruitment for revenue, lack of legitimate product value, and signs of a Ponzi scheme structure mean that engaging with DexNet poses significant financial risk. Trusting such a platform could lead to inevitable financial losses; it’s strongly advised to avoid any participation in or investment with DexNet.