Criminal investigations that often take years – The structural reality behind proceedings against MLM and crypto networks
Complex systems, slow justice?
When international MLM or crypto investment schemes collapse, many victims ask the same question: Why doesn’t the state intervene sooner? Why do house searches, arrests, or charges often only occur years after the first warning signs?
The answer lies less in a lack of interest on the part of the authorities than in the structural complexity of these systems. Criminal proceedings in the context of international MLM and crypto networks are among the most sophisticated forms of modern white-collar crime – and follow their own set of temporal patterns.
The legal hurdle: Not every MLM is illegal.
Multi-level marketing is legal per se. A business model only becomes criminally relevant when certain elements of an offense are met – for example:
- Fraud (§ 146 StGB),
- Investment fraud
- unauthorized financial services,
- or a prohibited pyramid and Ponzi scheme.
This is precisely where the central problem begins:
These facts must not only be suspected, but proven in a way that will stand up in court.
This is precisely where the central problem begins:
These facts must not only be suspected, but proven in a way that will stand up in court.
Specifically, this means:
- Analysis of thousands of presentations and marketing materials
- Analysis of contracts and payment flows
- Testimony from participants worldwide
- Proof that the promised returns were objectively unrealistic
- and in particular: that those responsible were aware of this impossibility
This process of proving one’s case is not quick – it regularly involves years of detailed work.
International structures as an obstacle to investigation
Modern systems are deliberately not organized nationally, but are fragmented in structure:
- Offshore companies
- international payment service providers
- Wallet structures outside of traditional banking systems
- global promoter networks
For investigators, this means that
every relevant piece of information lies in a different jurisdiction.
The result:
- Legal assistance request (MLA procedure)
- different legal standards
- Delays of months to years
A
“Investigations don’t end at borders – they only begin there.”
Cryptocurrencies: Transparent – but difficult to use
A common misconception:
Blockchain = transparency = simple explanation.
The reality is more complex:
- Wallet associations are not automatically personally identifiable.
- Transactions run across multiple chains, bridges, and exchanges.
- Off-chain structures obscure economic relationships
Investigators must:
- Analyze wallet clusters
- Request Exchange data
- Reconstructing payment flows
- Identify beneficial owners
This financial forensic work is highly specialized – and extremely time-consuming.
Responsibility in the MLM system: Who is the perpetrator?
A key structural problem:
MLM systems consist of several levels:
- Operator / Developer
- regional managers
- promoter
- simple participants
The central legal question is:
Who is criminally responsible – and to what extent?
Typical defense strategy:
“I only applied – I believed in it myself.”
The distinction between:
- intentional complicity
- negligent behavior
- and mere participation
It is highly complex from a legal perspective and requires detailed case-by-case examination.
Investigations often only begin after the collapse.
Another pattern repeatedly emerges in practice:
- As long as payments are made → low number of complaints
- Authorities receive only sporadic tips.
- The system continues to grow.
Only at:
- Payment stops
- Platform shutdowns
- or bankruptcies
The true extent of the damage will become visible.
Only then does the full criminal investigation often begin.
Resource issue: Large-scale processes tie up years
International economic crime proceedings are extremely resource-intensive:
- specialized investigators
- IT forensics
- Blockchain analysis
- international cooperation
- thousands of victims
A single case can tie up teams of investigators for years.
An example from the myWorld / Lyconet environment also shows that even in insolvency proceedings:
- Data must first be painstakingly backed up and evaluated.
- Different IT systems complicate reconstruction.
- and even basic claims assessments remain complex
Size as a problem of determination
Paradoxical, but true:
the larger the system, the more difficult the investigation.
Combining large networks:
- global sales structures
- Token economies
- Offshore companies
- international payment flows
This leads to:
- unclear responsibilities
- fragmented evidence
- and massively extended investigation times
Smaller fraud schemes are often easier to uncover – large systems are not.
Conclusion: Slow justice – or complex reality?
The often-criticized delays in investigations against international MLM and crypto schemes are in most cases not a failure, but a direct consequence:
- complex proof
- international structures
- technical challenges
- and limited resources
At the same time, experience shows that
even highly complex systems can ultimately be prosecuted – but not in line with public expectations, rather within the framework of due process.
A notice:
This article presents a journalistic analysis. To the best of our knowledge, it separates facts, assessments, and opinions.
It is based on publicly available information, insolvency law reports, and general principles of criminal law. A final legal evaluation of individual systems remains the prerogative of the competent courts.
I am still waiting for refund from GSP since 2022 my fund is frozen. SEC in USA settled the lawsuit in October 2024. GSP suppose to refund the deposit we put. Until 4/2026, Alixpartners, the Lawfirm GSP hired said they can’t find the money yet
The statement that no funds have been found so far is unfortunately not unusual and does not automatically mean that a thorough investigation is not being conducted.
The central problem is that investigations must be legally admissible. “Investigating across borders” is not freely possible for AlixPartners, but is bound by national jurisdictions and international legal assistance procedures. Even if money flows can be technically traced, that is not enough; what is crucial is whether the assets are also legally accessible and enforceable.
Many such systems exploit precisely these limitations by distributing funds across various countries and structures at an early stage. In practice, “not found” therefore often means that no accessible assets could be identified.