Central Bank Flags TM App as Illegal Pyramid Scheme, Warns Public Against Participation

The Central Bank of Sri Lanka (CBSL) has officially identified the TM App as a prohibited pyramid scheme, issuing a stern public warning against engaging with the platform in any capacity.

Official Declaration by the Central Bank

The CBSL made the announcement as part of its ongoing efforts to protect Sri Lankan consumers from fraudulent financial schemes operating within the country. The regulator confirmed that the TM App falls squarely within the definition of a pyramid scheme, which is explicitly prohibited under Sri Lankan law.

Pyramid schemes typically operate by recruiting participants with promises of high financial returns, where earnings are generated primarily through the enrolment of new members rather than through any legitimate business activity or investment. Such models are inherently unsustainable and inevitably collapse, leaving the majority of participants — particularly those who joined later — facing significant financial losses.

A Warning to the Public

The Central Bank has urged all members of the public to refrain from joining, promoting, or investing money through the TM App. Authorities cautioned that individuals who participate in pyramid schemes risk losing their entire invested capital, with little to no legal recourse for recovering funds once the scheme unravels.

The Central Bank of Sri Lanka continues to advise the public to exercise extreme caution and to verify the legitimacy of any financial platform or investment opportunity before committing funds.

Legal Implications

Under Sri Lankan legislation, operating or participating in a pyramid scheme carries serious legal consequences. The CBSL reminded the public that such schemes are not merely financially dangerous but also constitute criminal activity under the country's financial regulations.

The regulator encouraged anyone with information regarding the operation of the TM App or similar prohibited schemes to report such activities to the relevant authorities without delay.

Broader Context

This latest warning reflects a broader pattern of concern among Sri Lankan financial authorities over the proliferation of digital platforms and mobile applications that promise easy returns to unsuspecting users. As internet access and smartphone usage continue to grow across the island, regulators have stressed the importance of public vigilance against online financial fraud.

Sri Lankans are advised to consult the CBSL's official communications and verified listings before engaging with any financial service or investment application, particularly those operating primarily through social media channels and mobile platforms.