The National Consumer Commission (NCC) has declared Obelisk a multiplication scheme after about 4,000 participants from eight WhatsApp groups lost R112 million in an alleged scheme selling bitcoin mining machines.<\/p>\n
This comes after the NCC received complaints from consumers alleging that the promoters of Obelisk have financially swindled them.<\/p>\n
According to a statement released on Friday, the complainants allege that close friends and relatives, who persuaded them to purchase a \u201cbitcoin mining machine\u201d from Obelisk to generate daily income, recruited them.<\/p>\n
These machines, according to the participants,\u00a0 cost between R340 and R450,000.<\/p>\n
\u201cParticipants were recruited on social media platforms, such as Facebook, where they were required to make a minimal investment. Upon joining and making an initial investment, they were added to different Obelisk WhatsApp groups.<\/p>\n
\u201cSome participants received minimal returns to lure them into making more investments.\u201d<\/p>\n
The members, according to the NCC, allege that the problem started when they invested bigger amounts and were unable to make any withdrawals.<\/p>\n
\u201cWhen confronting the operators about the inability to make withdrawals, they were blocked from the system and removed from the WhatsApp group.\u201d<\/p>\n
According to the NCC\u2019s preliminary findings, Obelisk is a multiplication scheme.<\/p>\n
The Consumer Protection Act (CPA) states that a multiplication scheme is an arrangement where a person offers, promises, or guarantees any participant an effective annual interest rate that is at least 20% above the repo rate as of the date of investment.<\/p>\n
The scheme, according to the NCC, is operated by non-South African citizens, who are using South African bank accounts and either South African or non-South African cellphone numbers.<\/p>\n
\u201cThese bank accounts were opened by South Africans who handed them to the perpetrators; the same is done regarding the South African cellphone numbers.\u201d<\/p>\n
To date, the NCC said it received 25 complaints from participants who lost a total of R750 000.<\/p>\n
\u201cWhile the exact amount lost by participants in this scheme is unknown, the NCC\u2019s preliminary investigation indicates that there were about 4 000 participants from eight WhatsApp groups and the participants lost about R112 million.\u201d<\/p>\n
Multiplication schemes are prohibited in terms of the CPA, which provides that a person must not directly or indirectly promote, join, enter, or participate in a multiplication scheme.<\/p>\n
\u201cThis implies that the operators of Obelisk and those South Africans, who invested in either Obelisk or opened bank accounts or cellphone numbers, engaged in illegal activities.\u201d<\/p>\n
The Global State of Scams Report 2022, published by the Global Anti-Scam Alliance (GASA), estimates that in 2021 alone, South Africa lost about R1.8 billion due to scams.<\/p>\n
NCC Acting Commissioner, Thezi Mabuza, said the pyramid and multiplication schemes increased sharply since 2020, owing to the advent of the Covid-19 pandemic, accelerated levels of unemployment, and people looking at making quick cash in the shortest time possible.<\/p>\n
\u201cWe implore members of the public to spare themselves from heartache and suffering by not joining these deceptive schemes.<\/p>\n
\u201cHistory is replete with many examples of these schemes that inevitably collapsed, often leaving a trail of financial distress, broken trust, friendships, and even broken families.\u201d<\/p>\n