What is it about fund that brings out the worst in people?
Although the 2018 bear market sent many scammers back into their hiding gaps, the recent bitcoin price boom has provided an opportunity for unscrupulous and unethical people to con gullible people of their savings.
And they have.
It’s no secret that Africa is a hotbed for crypto victimizes. Bad actors based in either Europe or the United State target and exploit uneducated and often inadequate Africans with speculation openings that promise outstanding decisions in a short period of time.
The charlatans then disappear several months after setting up business leaving the poor investors out of pocket.
Crypto swindles have resulted in numerous Africans losing confidence in digital monies. If you were to mention bitcoin to anyone whose family member has to be victims of a victimize, you’d probably be met with a immediate dissent and reasons why bitcoin itself is the biggest scam ever.
In this article, I interpret some of the worst bitcoin victimizes to have made the African continent — defrauds that have contributed to the retard proportions of bitcoin approval in Africa.
Let’s dive in.
1. MMM
Mavrodi Mundial Moneybox( MMM ) is one of the oldest and largest Ponzi schemes in the world. Founded by Sergei Mavrodi, a convicted Russian fraudster, the company has been operational since 2007 — with on-and-off runnings in different countries.
The rise of Bitcoin spurred MMM’s entry into the African space in 2012. In Kenya, MMM became favourite in late 2017, which is when I first know where it is. A friend’s mom tried to convince me to join the getup as her referral. While trying to convince me to join, she predicted 50 percent return on my bitcoin/ cash investment.
Long story short, I didn’t join due to lack of funds to pay for the membership. This absence of monies was a blessing in masquerade, since MMM came hurtling down a few months later after its founder died.
Before coming to Kenya, MMM had previously scammed thousands of South Africans and Nigerians out of their savings squandering a similar coming to the one used in Kenya.
The MMM approach to the African market took advantage of Bitcoin’s promise to free people from banks and social inequality. In both Nigeria and Kenya, MMM claimed to be a mutual fund platform where useds would contribute their bitcoin to a common fund reserve and, in turn, recognize 50 percent returns on their investments.
2. Nigerian Calabar Company
Nigerians have garnered a negative reputation of being online scammers, so any news of Nigerians having being conned is ascertained by some as karma compensating them back.
Such was the case in April 2018 after a Bitcoin company based in Calabar, Nigeria, disappeared with millions of Nigerian naira in consumer speculations.
According to the Guardian, over 1,000 parties had invested in the bitcoin trading companionship after being predicted quick returns — up to 30 percent interest in one week. However, various weeks following the implementation, the company shut down, leaving investors stranded.
After this victimize, the Nigerian government cautioned its citizens against investing in cryptocurrencies indicating the adverse impact that swindles have on bitcoin adoption.
3. BTC Global
If it clangs too good to be true, it probably is.
This was the case in South Africa in May 2018 after thousands lost more than $ 80 million total in a bitcoin swindle orchestrated by BTC Global, a bitcoin trading company.
The company targeted members of the community and urged them to invest with a hope of 2 percent interest daily, 14 percent weekly and 50 percent monthly. However, after two weeks of operation, the company closed patronize and fled with millions in assets.
4. Bitcoin Lottery Scam
In January 2019, scammers made a different approach to gypping Southern african.
Rather than constituting as an investment opportunity, scammers generated a fake lottery in which participates were required to donate bitcoin in order to be entered into a derive where they could earn $70,000.
As has occurred in the U.S ., the fraudsters squandered luminary affirmation to gain public confidence. Hackers took self-control of the South African Cricket Federation Twitter account and used it to promote the scam.
Fortunately, the swindle was discovered early enough and the South African cricket body was able to warn its adherents against moving their BTC to the scam lottery.
5. Velox 10 Global
In March 2019, hundreds of Kenyans were left in shock after a bitcoin investment company they had invested in crumbled. Velox 10 Global, a Brazilian investment company, collapsed after just one year of operation, leaving investors stranded and confused as to the fate of their speculations.
The company had was initiated in a colorful service in one of Kenya’s most expensive inns and had filled a squad of local marketers to help in its operations.
During its one year of operation, Velox 10 was able to draw in thousands of Kenyans, with some claiming to have lost as much as $ 30,000( 3,000, 000 KES ). To connect the financing clothing, representatives were required to pay a enrollment cost of $100, after which they were predicted daily returns of $4,000.
The company promised its top investors errands where they would meet up with heading business gurus who’d advise them on how to improve their capital.
After MMM and Velox 10 world-wide, more Kenyans have become skeptical about investing in bitcoin, which is now being associated more readily with defrauds.
6. Bitcoin Wallet
South Africans seem to be the target of numerous crypto victimizes.
In June 2019, a company by the name of Bitcoin Wallet was reported to be raking in over $130,000 daily from an suspect bitcoin scam.
Based in the KwaZulu-Natal province, a agricultural city in South africans, Bitcoin Wallet has taken advantage of the current bitcoin price boom and used it as an opportunity to promise unsuspecting investors 100 percent advantages on their assets.
Bitcoin Wallet is targeting poor and uneducated villagers who don’t understand the dynamics of how bitcoin labors.
For example, bitcoin has never soared by 100 percentage in three weeks. Any shrewd investor would know this fact. However, by targeting parties in rural hamlets( people who don’t understand that the bitcoin rate has never soared that high-pitched in so little time ), Bitcoin Wallet had an opportunity to rake in hundreds of thousands in dollars daily.
According to the company’s CEO, Bitcoin Wallet shapes money from buying and selling bitcoin and merely blames an administrative fee of 10 percentage to its purchasers.
The scheme was active for several months, quickly increasing in popularity, which resulted in an increase in membership fees from $6.74 to $337.
Local news outlets, however, called out the outfit for being a Ponzi scheme.
The accusations that Bitcoin Wallet was a victimize seem to have proven themselves is correct. At the beginning of July 2019, the founder disappeared, inspiring irritable investors to loot and kindle his home.
Avoid Falling Victim to Bitcoin Scams in Africa
Have you been approached by a family member or friend telling you about the newest and fastest course to make money through bitcoin? Has someone from design been preaching about this new investment opportunity that’s very good to be true? Have you received an email promising you to-the-moon-and-back returns on your bitcoin speculation?
If you’re a crypto enthusiast in Africa, you’ve probably come across one of the above situations.
So, how does one determine a crypto victimize? Look out for the following address 😛 TAGEND
1. The Promise of Outrageous High Returns
Most of the bitcoin victimizes mentioned above are multi-level marketing( MLM) swindles. These frauds often depend on network marketing to get more consumers.
One of the most common characteristics of MLM swindles is the promise of outrageously high-pitched returns. A business that promises you 100 percent returns in only a few weeks after investing is probably a pyramid scheme.
MMM, Bitcoin Wallet and Velox 10 Global used this tactic to enticement more parties into their nets. They predicted exponential returns to investors — promises of returns never again seen in the bitcoin market.
So, the next time you’re looking to invest in a Bitcoin company, consider the promised returns versus how world markets is behaving at the moment. A company can’t promise 100 percent returns while bitcoin is exclusively ensure 10 percent amplifications weekly.
Also, understand that bitcoin is highly volatile. Therefore, anyone giving you a guarantee of high-pitched returns either knows something that the rest of the world doesn’t or is lying to you( and it’s probably the latter ).
2. High Pressure Sales Tactic
“Be among the first investors. As a pioneer investor, you can earn more as more parties connect the company. It’s better to be an early investor; at least you will have reaped your investment if things come apart( rendition: When the swindle comes hurtling down ). ”
While trying to enroll me for MMM, my friend’s mom use the same exact statement. As an early investor, I’d be able to earn more from MMM.
These high-pressure auctions tactics means to construct you invest your money without deporting fairly due diligence into the company.
If you’re being propagandized to invest your fund “early, ” make great care. There’s a good chance you’ll end up losing your money while waiting for the crowd to join.
3. Expensive Onboarding Training
“To join, all you need to do is invest $ 100, then pay for training.”
This is a common explanation among Bitcoin MLM scams in Africa. From MMM to Bitcoin Global, you either must pay a high membership fee or have to pay for training. Or both.
Legitimate companies should train their marketing teams for free and hold annual conventions and networking events for their members.
If a company requires you to invest a high amount of money in trained for hopes of high returns, this is likely to be a scam.
Avoid it like the haras.
4. Does the Founder Have a Criminal Past?
Would you expend your money with someone who has been convicted of financial crimes? Or with someone who has no illustrated history of expertise in their industry?
In the case of the defrauds above, many of the founders are either imprisoned crimes or people who have zero event with bitcoin and other cryptocurrencies.
The MMM founder was previously convicted of monetary crimes in Russia. The Bitcoin wallet founder, Sphelele “Sgumza” Mbatha, is a former paramedic who has no technological or fiscal training to launch a bitcoin investment company.
If you don’t want to finance the activities of a imprisoned criminal or incapable dilletant, conduct substantial research into the company’s team before investing. If your search turns up nothing good, keep walking.
Be a Bitcoin Proponent to Advance Bitcoin Adoption in Africa
Bitcoin has the potential to help fight off poverty in African countries. However, crypto victimizes that target the same beings that bitcoin is bound to be helping negatively affect the reputation of the king of crypto, which has negatively affected the adoption process in the continent.
As an investor, avoid the “microwave” mentality. Success doesn’t occur overnight. If a company is predicting returns that are unheard of, think twice. Do your research before investing in any crypto corporation.
Also educate fellow Africans on the basics of Bitcoin and repetition its core both benefits and thinkings. Let them know that Bitcoin, itself, represents audio, unhackable and non-confiscatable money that is not intended to be put in the restrain of anyone else. Then show them how to discern MLM scammers who are trying to undermine this ethos. If Bitcoin is to become mainstream in Africa, it will make the effort of each and every enthusiast who cares about the continent.
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