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South Africa investigates investors’ $80m cryptocurrency scam


South African authorities are investigating an alleged cryptocurrency scam that defrauded investors of 1 billion rand ($80 million) with promises of huge returns that never materialised, police said on Friday.
Police investigator Yolisa Matakata said in Johannesburg that it was searching for a company, alleged to be involved in the scam
Matakata said the fraud investigation showed the company told clients they would earn 2 per cent per day, 14 per cent a week and 50 per cent in a month, should they key into the cryptocurrency deal.
Cryptocurrency (bitcoin) is a digital or virtual currency in which coded techniques are used to regulate the generation of units of currency. The deal verifies the transfer of funds independently of a country’s central bank.
The police said a search for the company on the internet showed its services had been suspended.
The website lists Steven Twain as the “primary trader”. A request for comment by Reuters sent to an email address listed on the website as belonging to Twain received no response.
The police said members of the public were believed to have been targeted as part of the scam and encouraged by agents of the company.
“Some of the investors got paid in terms of the agreement. However, the payments suddenly stopped.
“This may prove to be the tip of the iceberg with potentially thousands more yet to discover they’ve lost money,” Matakata said, in a statement.
Local technology news website mybroadband.co.za had reported in March that more than $50 million was lost by investors in BTC Global.
The investigation follows a case this week where kidnappers demanded a ransom in bitcoin of nearly $120,000 to release a South African teenage boy.
On Thursday, South Africa’s central bank said it was in the process of determining whether cryptocurrencies complied with its financial surveillance and exchange control regulations.