On Might 25, 2018, South African authorities introduced additional info of an ongoing investigation of a cryptocurrency scam that has price traders one billion rands ($80 million).
False Claims and Investor Pitfalls
In response to Reuters, South African police mentioned that the investigation concerned BTC International, a cryptocurrency buying and selling firm. The cryptocurrency firm instructed shoppers they might earn substantial returns beginning with two p.c per day, to 14 p.c per week, and finally 50 p.c in a month.
On BTC Global’s website, they said that they suspended their companies. The observe on the positioning lists Steven Twain as the corporate’s “major dealer.” The web site additionally said that “till Steven Twain resurfaces or is discovered there’s nothing the admin crew can do.” The admin crew left Steven’s contact particulars. Whereas Reuters reached out to Twain’s e-mail tackle, they obtained no response.
South African police talked about that “members of the general public are believed to have been focused as a part of the rip-off and inspired by brokers of BTC International. A number of the traders acquired paid by way of the settlement. Nonetheless, the funds all of the sudden stopped.”
Extra essential is the truth that BTC International had already scammed cryptocurrency traders for greater than $50 million by March 2018. Associated studies indicated that traders “ought to have seen that BTC International was a rip-off from a mile away” since their unusually excessive returns are much like different cryptocurrency scams like Bitconnect.
“This will likely show to be the tip of the iceberg with probably hundreds extra but to find they’ve misplaced cash,” mentioned Yolisa Matakata, a police investigator on the BTC International Case.
BTC International Suspends Providers
In response to the BTC International website, the “cost data was despatched to Steven Twain on Sunday 18 February 2018 as has been performed by the admin crew every week since final 12 months. Steven didn’t acknowledge receipt of the knowledge. Steven has not contacted anybody in management or admin crew. No funds have been made by Steven. The admin crew can not find him. If anybody has any info on how we will get in touch with him, please get in contact and tell us.”
“We’re as shocked and offended as everybody. However all of us knew the dangers concerned in inserting funds with Steven. All of us grew to become complacent with Steven. And all of us funded him independently.”
A reported 27,000 individuals have been scammed within the heist. Whereas many South Africans have been concerned, there are studies of different worldwide victims from the USA and Australia. South Africans did, nonetheless, lose between 16,000 to 1.four million rands ($1,280 to $112,000).
Do Your Due Diligence
Whereas many cryptocurrency scams might be very convincing, even novice traders ought to have been aware of all of the pink flags on BTC International’s web site. By bringing again an archived model, Mybroadband, a regional know-how information website, deconstructed the web site. They commented that the extraordinarily excessive returns, referral commissions, and poor internet design have been components retail traders ought to have famous earlier than investing within the firm.
Moreover, the truth that BTC International solely has one picture of their “grasp dealer” ingesting a vanilla milkshake is a far cry from any form of monetary legitimacy. There’s additionally little or no info on-line regarding Twain’s background data and buying and selling expertise.