Africa awash with Cryptocurrency Scams promising High Returns at Zero Risk

naive african investors scammed

Get rich quick scams are improverishing naive investors - below are tips on how to spot them

Scammers are rampaging Africa with various new scams ranging from the usual pyramid schemes to the new cryptocurrency schemes that promise high returns at no risk. 

In Uganda, over 10,000 people are counting their losses after an alleged fake Malaysian business closed shop after collecting billions of shillings from its victims.

The scam ensnared its victims through mobile money platforms with promises of daily earnings of up 35% for two months and hefty commissions for attracting new members.

Communications with the scam leaders were through social media channels like whatsapp and telegram where they reassured their members of not being scam but rather a legitimate business. None of the scam leaders were accessible through same channels after the scam collapsed.

This scam comes on the heels of another forex trade scam discovered early this year in northern Uganda where 15,000 people were scammed out of 10 billions shillings ($2.8 million) within three months.

In Kenya, Joe Mucheru, a cabinet secretary disclosed that Kenyans had lost $120 million in cryptocurrency scams in 2021 due to lack of information that people need to make the right decisions.

In South Africa, over 5000 people were scammed after investing in a fake company, known as "Mr.Coin" which promised non-existent returns of between 80% and 150%. 

Mr.Coin scammers went searching for victims at schools and created competitions for members to win prizes. They particularly targeted professionals like nurses, teachers, police officers to make their scam appearlegitimate to doubting victims.

Mr.Coin operated out of a shopping centre where they asked victims to send them hard cash rather than depositing money in the bank. The scammers also promised a 10% commission to their employees for every new client they registered. The desperate victims alerted police when they the found the offices of scammers closed and unable to recover their investments.

Following the advice of an old adage, "if its so good to be true, it probably is", enables person to be skeptical of any business promising abnormal returns. Here are other tips to reduce falling into various scams:

  • If there is a guaranteed offer of high returns with minimum to no risk with little or no explanation of business activities or how returns are generated.
  • Your friend's referral or success with a business platform is not a guarantee that its a legitimate business. Do your own research. The scam in Uganda succeeded because friends recruited each other and partly due to the huge profits paid out in the initial phases of the scam.
  • Do not click on link on links or open every attachment you receive. As these will often lead to malicious software getting onto your device giving an attacker access to your details, contacts and messages.
  • Before investing in cryptocurrency, do deeper research on the assets that you are investing in, and if you do decide, only invest what you are willing to lose. Avoid basing your investment decisions on only news stories due to the fear of missing out on profits when cryptocurrency prices skyrocket.

No one gives out money for free, regardless of whether the individual is a billionaire or not. Tame your desire for getting rich quick to reduce on getting counted among gullible and naive investors. 

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