South Africa investigates investors’ $80m cryptocurrency scam


South African authorities are investigating an alleged
cryptocurrency scam that defrauded investors of 1 billion rand ($80 million)
with promises of huge returns that never materialised, police said on Friday.
Police investigator Yolisa Matakata said in Johannesburg that it was searching
for a company, alleged to be involved in the scam
Matakata said the fraud investigation showed the company told clients they
would earn 2 per cent per day, 14 per cent a week and 50 per cent in a month,
should they key into the cryptocurrency deal.
Cryptocurrency (bitcoin) is a digital or virtual currency in which coded
techniques are used to regulate the generation of units of currency. The deal
verifies the transfer of funds independently of a country’s central bank.
The police said a search for the company on the internet showed its services
had been suspended.
The website lists Steven Twain as the “primary trader”. A request for comment
by Reuters sent to an email address listed on the website as belonging to Twain
received no response.
The police said members of the public were believed to have been targeted as
part of the scam and encouraged by agents of the company.
“Some of the investors got paid in terms of the agreement. However, the
payments suddenly stopped.
“This may prove to be the tip of the iceberg with potentially thousands more
yet to discover they’ve lost money,” Matakata said, in a statement.
Local technology news website had reported in March that more
than $50 million was lost by investors in BTC Global.
The investigation follows a case this week where kidnappers
demanded a ransom in bitcoin of nearly $120,000 to release a South African
teenage boy.
On Thursday, South Africa’s central bank said it was in the process of
determining whether cryptocurrencies complied with its financial surveillance
and exchange control regulations.