Kenyans Lose Ksh 1.1B to Chinese Investor in New Bitcoin Scam

A hacker wearing a hoodie operates a computer
A hacker wearing a hoodie operates a computer

Thousands of Kenyans are counting losses after they lost Ksh1.1 billion (USD10 million) in a new cryptocurrency scam.

According to a cryptocurrency website, the individuals were duped by a company Christened Bitstream Circle whose records showed that it was registered in the United Kingdom.

The individuals were lured into the Ponzi scheme after being promised a daily return of investment of between 5% and 8%.

According to the publication, the scheme expanded to include 11,000 members drawn from seven countries and showed that a Chinese National Quin Yang was registered as its director.

graphic representing Bitcoin
graphic representing Bitcoin.

With the attractive interest package, a number of individuals invested in the scheme before it collapsed. 

The woes began on March 13, when investors reported that they were unable to withdraw their money but the company was quick to issue a clarification that it was a system upgrade.

The issue, however, persisted beyond the five hours the administrator explained was the duration the upgrade was to take place.

The scam expounds on the losses Kenyans have incurred in an attempt to invest in the emerging cryptocurrency market which is gaining momentum on the continent.

On March 11, Information, Communication and Technology (ICT) Cabinet Secretary Joe Mucheru confirmed that Kenyans lost over Ksh13.7 billion (USD120 million) to cryptocurrency scams in a span of one financial year.

He also called on the press to ensure that proper information regarding the investment markets is provided to prevent Kenyans from falling for financial scams.

"In the last financial year, did you know that Kenyans lost about USD120 million in scams on cryptocurrency? That is a crime. It is being reported out there but many of your readers are being caught up in some of these things and end up suffering on their own.

"You can be giving people a lot of guidance on where they should invest and how they can protect themselves," he implored the media.

In the recent years, Kenya has emerged among the fastest growing cryptocurrency markets with many businesses locally now accepting cryptocurrency, mostly Bitcoin, as a form of payment.

File image of ICT CS Joe Mucheru
File image of ICT CS Joe Mucheru
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