• The alleged Ponzi scheme was officially registered as Bitstream Circle Limited in the United Kingdom in November 2021, with Quin Yang, a Chinese national, listed as the director.
• The commission disclosed that Obelisk had enticed victims through social media platforms such as Facebook.

A man from Kenya has recounted the unfortunate experience of himself and other cryptocurrency investors losing their money in a fraudulent Bitcoin mining scheme. According to the man, he was introduced to a website called BTCM, which made enticing promises of substantial returns through investments in Bitcoin mining.

Kenyan Man Cries Foul: Bitcoin Mining Broker Scams Thousands of Kenyan Shillings

Moe, a renowned financial guru, shared screenshots on his Twitter account he had received from one of the investors. The said investor disclosed that he and others were brought together through a WhatsApp group. The group organized and gathered funds from various Bitcoin investors in the country. The man provided evidence of his involvement by sharing a screenshot displaying transaction details from M-Pesa (a local payment system).

The post sparked a discussion among users on social media, with some individuals sharing their encounters with the website that ultimately folded, resulting in the loss of their funds.

Deceptive Promises

This is not the first time such an incident has occurred. Earlier this year, there were reports from Kenya indicating that investors were involved in an alleged crypto Ponzi scheme called Bitstream Circle. These reports further suggest that the masterminds behind the scheme might have absconded with investors’ digital assets, estimated to be valued at over $10 million.

According to one report, the alleged Ponzi scheme was officially registered as Bitstream Circle Limited in the United Kingdom in November 2021, with Quin Yang, a Chinese national, listed as the director. The report also reveals that within fewer than four months, the scheme attracted over 11,000 members from seven different countries. Most victims were seemingly enticed by the promise of a daily return on their investment ranging from 5 percent to 8 percent, as highlighted in the report.

The Crypto Pyramid Schemes are not only in Kenya. Recently, the National Consumer Commission (NCC), a consumer watchdog in South Africa, disclosed that Obelisk, a company claiming to be a supplier of Bitcoin mining equipment, is, in fact, a pyramid scheme that has deceived unsuspecting investors and defrauded them out of millions of dollars. The NCC made this revelation after receiving complaints from affected investors.

As per a report by Businesstech, approximately 4,000 individuals took part in the investment scheme, believing that they were purchasing bitcoin mining equipment that could generate a steady income for them. The report further stated that these machines were worth between $18.75 and $24,850

The commission disclosed that Obelisk had enticed victims through social media platforms such as Facebook.

Identifying Scam Crypto Projects: Key Indicators to Look For

Below is a compilation of indicators that may indicate a project’s potential involvement in a scam or rug pulls.

Documentation (White Paper) – The white paper comprehensively explains a project’s technological objectives. Users should approach a white paper cautiously if it emphasizes factors that increase the value of the asset they are being sold without adequate addressing of the project’s code, economics, business model, and other essential aspects

Reputable projects typically present detailed white papers and thorough research substantiating their purpose.

The Project Team– There are key factors to consider when evaluating a project’s team, including their identity, professional background, and relationships.

Exercise caution when encountering premature partnership announcements, particularly if the project is relatively new. Establishing a strong reputation with entities like venture capital firms, the media, or major exchanges requires significant time and effort.

Roadmap Assessment – A roadmap is a visual representation or chart outlining the project’s plan for technology adoption. Additionally, it serves as a condensed version of the white paper, providing an overview of the project’s long-term strategy and highlighting past accomplishments.