Another Crypto Fraud as Bitcoin Thugs Arrested in Kenya

• The gang has been hacking people’s credit cards and using the money to buy Bitcoins.
• This comes after the Bitstream Circle fiasco designed by Chinese and Kenyan fraudsters hit the country.
• Will the Kenyan government ban unregulated cryptocurrencies?

Bitcoin, the overly hyped crypto, has been hitting the headlines for the wrong reasons recently.

A notorious gang of bitcoin thugs was arrested by the DCI (Directorate of Criminal Investigation) in Nakuru, Kenya.

The gang has been hacking people’s credit cards and using the money to buy Bitcoins.

The cohort was carrying out its operations in the Milimani neighborhood.

The gang comprising of two young men aged 26 and 25 were found in the company of two ladies during the raid.

Then there was the Ponzi Scheme 

Francis Maina Alias Nick and Zellic Alusa used the money from people’s credit cards to buy bitcoin which they later converted to Kenyan currency. The two students from Kenyatta University created fake email accounts and used them to hack people’s credit cards.

They mainly targeted people living in foreign countries. After converting the bitcoins to Kenyan shillings, they lived a flashy lifestyle by entertaining young women and buying properties. 

Some of the documents found in the raid were linked to a land sale agreement valued at $8500 in Juja.

This comes days after the Bitstream Circle fiasco designed by Chinese and Kenyan fraudsters hit the country. The Ponzi scheme, which had promised a return of 5-10% on initial investment came to light on December 7, 2021.

In 6 months, it gained over 10,000 followers on its Telegram page. For a person to join the scheme, they were required to make $ 20 deposits as initial investment. The Ponzi scheme created the Bit Elite Team Group to lure more people to join.

However, in March 2022, members began noticing some delays in withdrawals. Bitstream Circle said that it was upgrading its systems. After five hours of upgrading the systems, the page administrator posted to the 10,914 investors that they had been played. Just like that, their money was lost and accounts cleaned.  

Should Crypto be regulated?

Cryptocurrencies are digital currencies that operate under no government control or oversight. This simple fact has made it easy for criminals and hackers to steal from people. Tech-savvy criminals hack people’s accounts or create fake crypto investment hubs to trap investors.

These hackers leave little or no trail and hence they cannot be easily traced. Although Kenya is a leading tech hub and a crypto adoption enthusiast, measures need to be taken in order to counter cybercrime.

His Excellency President Uhuru Kenyatta called for the strengthening of the Cyber and Digital Forensic Lab. 

The lab was set up to deal with cases of cybercrime and misuse of technology. Crypto adoption rates are high in Kenya with unregulated use in Community Inclusion Currencies, Bitcoin, Ethereum et cetera.

The Governor of the Central Bank of Kenya criticized unregulated crypto adoption citing the misfortunes of El Salvador. He said that a regulated currency such as the Central Bank Digital Currencies (CBDCs) will have a positive impact.

He stated that CBDCs will promote innovation, improve cross-border transactions, boost crypto security and reduce the cost of transactions.

With the rampant cases of crypto fraud due to low financial literacy in Kenya, will the government ban unregulated digital currencies?