South African Police Pursue An Alleged Crypto Fraud With 28,000 Investors

South African Police Pursue An Alleged Crypto Fraud With 28,000 Investors

A subdivision of South African police says it has started an investigation concerning an alleged investment scam, in which more than 28,000 people have incurred losses. As per the local police’s report, the investors have lost at least 1 billion rands which are equal to $80.4 million overall.

South African Investigation Into A Crypto-Scam

The news came out on Friday, May 25, saying that the Hawks, a division of the country’s Directorate for Priority Crime Investigation have delineated an alleged fraud case. As the South African police informed, it is related to “BitCaw Trading Company.” It is noted in the report that this organization is mostly known as “BTC Global.”

According to the report, it is thought that amateur investors were stimulated by BTC Global envoys to pile into them, promising a 2% daily interest, whereas the one for a week made up 14%, and the monthly interest – 50%. Allegedly, all the payments were carried out on Mondays.

It is noteworthy that some of the investors were paid according to the terms of the agreements. As the police announced, payments halted out of the blue, though.

Last year a marketing firm SEO Spark claimed that BTC Global was a scam, literally, a Ponzi-scheme. The claim was based on the infeasible pledges, including 4% referral programme, as well as other cautionary signs. The marketing agency, thus, forecasted that BTC Global investors would have lost their money.

BitCaw Trading Denial, BTC Global’s “Shock”

However, BitCaw Trading has negated that the company had any bonds with BTC Global. Giving an answer to the giant news agency Bloomberg, the company said:

“BitCaw Trading […] do[es] not manage third-party money or offer any kind of investment […] We are shocked to see our name connected with [the alleged scam].”

In its turn, BTC Global says it is shocked and angry about the situation like anybody else. But it has also said that it is its intangible ex-admin member, whose location could not have been found, who is to be blamed. Also, the company said:

“But we all knew the risks involved in placing funds with Steven. We all became complacent with Steven. And all of us funded him independently. Until Steven Twain resurfaces or is found there is nothing the admin team can do...”

The Police Will Keep Going

Despite anything, Yolisa Matakata, the South African Hawk’s Lieutenant general, asked all investors, who have suffered losses due to the alleged fraud, to come forward.

In the statement, he said:

“This may prove to be the tip of the iceberg with potentially thousands more yet to discover they’ve lost money.”

The news came not long ago after South Africa’s central bank has decided that cryptos are going to be officially called “cyber-tokens” due to the fact that they don’t fit the standards set by public currencies.

In the meantime, the American authorities have made a step forward in educating amateur investors against cyber-money-related scams, including the ones related to ICOs. In particular, the SEC has purposely established a site for fake ICO to show users how a fraud looks like. The site indeed counterfeits traditional “red flags” of scamming token sales.