South Africa investigates $80 million bitcoin scam

FILE PHOTO: Illustration of the Bitcoin digital foreign money standing on the PC motherboard is seen on this illustration image

Thomson Reuters

JOHANNESBURG (Reuters) – South African authorities are investigating an alleged cryptocurrency scam that defrauded buyers of 1 billion rand ($80 million) with guarantees of big returns that by no means materialized, police stated on Friday.

The fraud investigation entails an organization named BTC World, which instructed purchasers they might earn 2 p.c per day, 14 p.c every week and 50 p.c in a month, the police stated.

A seek for the corporate on the web confirmed its companies had been suspended.

The web site lists Steven Twain because the “main dealer”. A request for remark by Reuters despatched to an electronic mail tackle listed on the web site as belonging to Twain obtained no response.

“Members of the general public are believed to have been focused as a part of the scam and inspired by brokers of BTC World,” the police stated in an announcement.

“Among the buyers obtained paid by way of the settlement. Nevertheless, the funds all of a sudden stopped.”

Native know-how information web site mybroadband.co.za had reported in March that greater than $50 million was misplaced by buyers in BTC World.

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“This may occasionally show to be the tip of the iceberg with probably 1000’s extra but to find they’ve misplaced cash,” police investigator Yolisa Matakata stated.

The investigation follows a case this week the place kidnappers demanded a ransom in bitcoin of practically $120,000 to launch a South African teenage boy.

On Thursday South Africa’s central financial institution stated it was within the strategy of figuring out whether or not cryptocurrencies complied with its monetary surveillance and alternate management rules.

(Reporting by Mfuneko Toyana; Modifying by Joe Brock/Keith Weir)

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