BTC Mining Investment Platform Declared Pyramid Scheme by South African Consumer Watchdog – Regulation Bitcoin News
According to the National Consumer Commission, around 4,000 South Africans who invested in a bitcoin mining equipment provider, Obelisk, may have participated in a pyramid scheme. The commission said the participants in the pyramid scheme may have lost as much as over $6 million.
Obelisk used social media platforms to lure victims
A South African consumer watchdog, the National Consumer Commission (NCC) recently announced that Obelisk – a purported supplier of bitcoin mining equipment – is actually a pyramid scheme that has swindled millions of dollars from unsuspecting investors. The watchdog reportedly made the announcement after it received complaints from investors accusing Obelisk of defrauding them.
According to a Businesstech report, the 4,000 people who participated in the investment scheme were convinced that they were buying bitcoin mining equipment that could generate constant income for them. The machines cost between $18.75 and $24,850, the report added.
In a statement, the commission revealed that Obelisk had lured victims via social media platforms such as Facebook:
Participants were recruited on social media platforms, such as Facebook, where they were required to make a minimal investment. When they joined and made an initial investment, they were added to various Obelisk Whatsapp groups.
The watchdog added that some investors had received small returns to convince them to invest more.
Residents warned against falling for scammers’ tricks
However, problems soon started when investors were unable to make withdrawals. The report claims that people who confronted the operators of the scheme were blocked and then removed from the Whatsapp groups.
The NCC has reportedly confirmed receiving 25 complaints from investors who claim to have lost $41,400. However, the watchdog believes that as many as “4,000 participants from eight Whatsapp groups” may have lost the equivalent of $6.18 million.
According to Thezi Mabuza, NCC Acting Commissioner, South African citizens must avoid being duped by investment schemes that promise significant returns in a very short period of time.
“We ask the public to save themselves heartache and suffering by not joining these deceptive schemes. History is littered with many examples of these schemes inevitably collapsing, often leaving a trail of financial distress, broken trust, friendships and even broken families,” Mabuza said.
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