New Pyramid Scheme Costs Kenyans Life Savings

File image of Kenyan banknotes
File image of Kenyan banknotes

Kenyans have confessed to having drained their life savings and thrown it into an online-based investment platform dubbed Crowd1, that promised lucrative returns in record-time.

A victim, Clement Kimani, confessed to the media on how he started out by buying a Ksh12,647 package online that would allegedly bring in a profit of Ksh1,277 in under a week.

However, several months down the line, all he has to show for emptying his farming savings are motivational speeches and pamphlets.

His is the story shared by countless other Kenyans, South Africans and Nigerians who bought into what has since been defined as a pyramid scheme.

A man working using a laptop. Following the Covid-19 outbreak, working from home is the new normal
An individual using a laptop

In August 2020, Kenyan regulatory agencies warned the public of the re-emergence of fraudulent financial schemes out to defraud citizens under the guise of helping them make quick money during the ongoing Covid-19 pandemic.

The warning was sounded by the Central Bank of Kenya (CBK), the Capital Markets Authority (CMA), the Insurance Regulatory Authority (IRA), the Retirement Benefits Authority (RBA), the Sacco Societies Regulatory Authority (SASRA) and the Ministry of Industrialisation and Enterprise Development.

On September 10, the Common Market for Eastern and Southern Africa (Comesa), while warning consumers to be wary of pyramid schemes, gave the example of Crowd1, which “markets itself as a digital multi-level marketing company and whose operations are being investigated in some jurisdictions".

“Consumers are therefore advised to exercise caution when dealing with Crowd1 and also conduct research about companies they wish to invest in, to avoid losing their hard-earned money,” reads an excerpt of the Comesa statement.

In a feature by BBC Africa Eye, Crowd1 was exposed for its false promises to cover an old-fashioned pyramid scheme based on recruitment. 

The feature also exposed a handful of European scammers behind Crowd1, many of them Swedish, who have been raking in millions from the platform.

The BBC documentary includes a shocking testimony from a woman who spent her entire life savings on Crowd1 in the belief that she was buying shares in a business that would make her rich.

Watch the damning feature below:

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