Hawks launch investigation into R1 billion Bitcoin scam

A Hawks investigation has been launched into an alleged investment fraud involving Bitcaw Trading Company, commonly known as BTC Global, after more than 28,000 investors are believed to suffered losses exceeding R1 billion and counting.

In a statement released on Friday (25 May), the Hawks said that the investigation involves a company named BTC Global, which told clients they would earn 2% per day, 14% a week and 50% in a month.

As part of the arrangement, payments were allegedly made every Monday. While some of the investors were reportedly paid in terms of this agreement, the payments then suddenly stopped,

Acting national head of the DPCI, Lieutenant General Yolisa Matakata, encouraged members of the public who have invested in this scheme to come forward.

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

“(This) is a timely reminder that unregulated, unusual investments at home or abroad come with a high risk that people could lose all their hard-earned pension and other saving.

“Despite the setback we want to assure the affected individuals that we are investigating the matter but due to the large volumes, it will take time to conclude,” said Matakata.

Regulation

The investigation follows commentary released by the South African Reserve bank on Thursday, in which it clarified that it chooses  to call digital currencies such as Bitcoin “cyber-tokens” because they don’t meet the requirements to be classified as money.

“We don’t use the term ‘cryptocurrency’ because it doesn’t meet the requirements of money in the economic sense of the stable means of exchange, a unit of measure and a stable unit of value,” Reserve Bank Deputy Governor Francois Groepe told reporters in Pretoria on Thursday.

“We prefer to use the word ‘cyber-token’.”

The Reserve Bank has established a FinTech unit to review its position on private cryptocurrencies and to help draw up an appropriate policy framework and regulatory regime.

“We want to ensure or establish whether there is still compliance with the relevant financial surveillance or exchange-control regulations,” Groepe said.


Read: SARB says cryptocurrencies are ‘tokens’ and not a currency

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