How Kenyans lost millions in Bitcoin pyramid scheme
SCI & TECH
By Brian Ukaya | March 5th 2019
Kenyan Bitcoin investors have fallen prey to a Brazilian pyramid scheme which has gone down with millions of shillings they had invested in it.
The company known as Velox 10 launched operations in Kenya on September 20, 2017 and was run by a Brazilian international known as Ricardo Rocha.
Velox, which claimed to trade in bitcoins, promised to help Kenyan investors earn millions of shillings in profits.
In order for one to sign up, investors were required to pay Sh10, 000 ($100) as a membership fee, and an additional Sh20, 000 ($200) as upgrade fee with a promise of raking up to Sh400, 000 ($4,000) in daily profits.
Although investigations are still on-going, a report by the Daily Nation has revealed how innocent Kenyans were lured into the Velox 10 scam with some victims losing up to Sh3 million in the pyramid scheme.
As per Monday the Velox 10 website was not accessible neither had the investors been refunded back their hard-earned money.
How one is lured into investing in Bitcoins
The promise of huge cash flow and profits is one of the major factors that drives innocent investors into falling prey to Bitcoin scams.
Cryptocurrencies normally don’t pay dividends. The best thing one can do is hold them until prices go up.
When the prices are low, investors tend to lose a lot as some may end up trading in lower prices on investments they had put in a lot of money.
Referrals introduction by others is also another way that lures investors into trading on Bitcoins. One needs to think twice about joining dubious referral schemes. There are already many Kenyans dodging friends and relatives who have been hounding them to sign up to various schemes on the promise of assured returns.
All in all, the rise of cryptocurrencies has sparked both excitement and horror in investors across the world. There are those who believe the whole thing is a huge scam that will one day blow up, and there are those who believe that it is the beginning of a brand new Internet economy.
Early this year about Sh13 billion ($137.21 million) in cryptocurrencies was frozen in a user account of Canadian digital platform Quadriga after the founder Gerald Cotten, the only person with the password to gain access, died suddenly in December.
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