- A Ponzi scheme that emerged in December 2021 has scammed Kenyans millions of Dollars
- To be a member of the firm, Kenyans had to pay Ksh 2,340 ($20)
- CS reports how each year Kenyans lose millions of Dollars to crypto scams
A Ponzi scheme in Kenya, BitStream Circle, which was launched by a Chinese and a Kenyan is reported to have robbed its investors of $8.5 million (USD).
The firm which was mainly comprised of Kenyan investors emerged on 7th December 2021. Within a short period, its Telegram page had already acquired 10,000 members.
To be a member of the Bit Elite Team investors had to cash in Ksh2,340 ($20).
The investors had been promised a reward of 5-10% of their profits. Each day would record approximately 500 registrations.
How BitStream circle captured its prey
After joining the Bit Elite Team, a mentor was assigned to the investors to guide them on how to convert their cash into crypto coins.
The mentors would also notify them of the right time to trade, after teaching them how to trade, make a profit and withdraw their assets.
On a single day, the investors had five sessions to trade. Each session earned them 1-2% profit of their deposits, earning 5% profit in a day.
The investors would withdraw their assets through Binance, where the cryptocurrencies would be converted to shillings. However, withdrawals were limited and one will make just a single withdrawal which will take 30 minutes before reflecting on the Binance account.
And then hell broke loose
Everything was going on well until there were delays during withdrawals. On 13th March 2022, the firm informed its investors that there were system upgrades that caused the delays.
On 14th March 2022, the 10,914 investors received the worst news. An administrator posted “you are a bunch of brainless races, see you on our next plan. Bye, haha. I am living a luxurious life with your dollars. If you have invited friends, wait to be killed by your recommenders. Idiots.”
This was the last time the inventors heard from the firm.
Crypto scams are rampant
In March of 2022 the CS, Ministry of Information and Technology in Kenya, Joe Mucheru, highlighted that many Kenyans get scammed by crypto fraudsters. Each year Kenyans lose millions of Dollars.
The CS reported how Kenyans had lost a total of 120 million through cryptocurrency scams during the previous financial year.
The United Nations report estimates that $88.6 million (USD) is lost to crypto scams in Africa alone. Its 2020 report highlights how 0.34% of crypto transactions are grouped under illegal transactions.
This was a decrease from 2.1% of all global cryptocurrency transactions in 2019.
Though the UN report shows a reduction in crypto scams the Luna report shows a contrasting global trend.
During its 2022 survey, Luno, Africa’s leading crypto exchange reported that crypto scams are the most rampant crimes. Crypto scams sum up to 95% of all the crimes that involve customers being frauded.
The Luno report identifies three main reasons as to why the rate of crypto scams increase in Africa. Low financial education, poverty, crypto being a new technology and poor protection are some of the reasons that put Africans at the risk of being scammed.
