Potentially Massive Crypto Scam Investigated

News, Scams

The South African Police are investigating a possible crypto scam that may affect as many as 28,000 BTC customers. The alleged malfeasance involves the promise of interest paid for Bitcoin deposits, and today, it would appear that many investors might be left without anything.

BTC Global is reported to have ties to BitCaw Trading, but BitCaw denies any official links to BTC Global. According to a reputable source, BitCaw Trading has claimed that they have no ties to any sort of money management services and that they are shocked to see their corporate identity mentioned as a part of this emerging scandal.

BTC Global has parked the blame for this alleged crypto scam with a now rogue admin they refer to as “Steven,” who cannot be found at the moment. They also say that trust was placed with Steven and that all involved became complacent with the level of trust that was bestowed on him.

Promising Returns

The investors that are now wondering where their cryptos are were promised an incredible 2% rate of interest per day. Apparently, that added up to a 14% return per week and 50% per month. Reports from Steven’s clients say that at first the interest was paid, but recently, it just stopped.

At the moment, the safest government bonds return around 3% per annum, which puts the 600% per annum that Steven promised on some very shaky ground. While it is possible to lend Bitcoin to traders on a short-term basis at favorable rates, it is difficult to ensure that a high rate of interest can be guaranteed for any amount of capital or obtained at any time.

This potential crypto scam wouldn’t be the first to hit the market over the last year and helps to illustrate the need for some amount of regulation in the sector.

Crypto Scam Prevention

In North America, the US’s FTC is working to help crypto investors via a workshop that is set to take place next month.

On June 25, the FTC will host a free workshop in Chicago they call “Decrypting Cryptocurrency Scams.” The US government is still debating the legal status of cryptocurrencies and how they may be allowed to enter the mainstream financial market in the near future.

Major US investment banks are already allowing their clients to trade in crypto-based derivatives, which are in demand according to investment bank Goldman Sachs. Unlike the over-the-counter trading that many crypto exchanges offer, there is a growing movement on Wall St. to offer regulated ways to trade in the price movements of the crypto markets.

Nicholas Say was born in Ann Arbor, Michigan. He has traveled extensively, lived in Uruguay for many years, and currently resides in the Far East. His writing can be found all over the web, with special emphasis placed on realistic development, and the next generation of human technology.

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