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Law enforcement agencies revealed the arrest of one of the leaders of the crypto scam that saw hundreds of people lose 10 billion Ugandan shillings. The Ugandan police revealed that Mr Samson Lwanga director of Dunamiscoins Resourced Limited had been arrested last week and would be arraigned in court later in the week.
Lwanga was one of the directors of the crypto startup that suddenly fold up last week, leaving hundreds of people counting their losses.
How The Crypto Scam Scheme Unfolded
Just like the typical crypto scams, Dunamiscoins promised investors a large return on investments within a short period of time.
Participants were also incentivized to encourage friends and family to participate in the scheme which initially paid returns to users.
However, after accumulating huge sums of money, the company suddenly closed down leaving investors and employees in limbo. There was a dilemma last week when employees got to the office of the company for their daily activities, only to find that the office doors were shut and phone lines disconnected.
It is understood that Lwanga has told police that he is willing to refund the money back to investors but cannot due to banks freezing their accounts.
Local reports reveal that it is unknown how many people were affected by the scam with authorities continuing investigations to the depth with conflicting claims. Some victims claimed that the number of people that registered with the platform was closer to 10,000
Africa Has Had Its Fair Share of Ponzi Schemes In Recent Years
This is not the first time something similar is happening in Africa with the popular MMM scheme which affected countries like Nigeria, Kenya, and Zambia some years back.
The lack of regulations of such schemes is a reoccurring theme in the continent where authorities do not act until its too late to recover funds.
While Blockchain technology and cryptocurrency have been finding difficult to operate within Africa, scams like this would only continue to increase skepticism toward cryptocurrencies and government hostility for the technology.
These scams have also begun to crop up in other regions across the world with Brazilian police recently busting a Bitcoin investment scheme which duped unsuspecting victims close to $359 million.