Crypto scams in South Africa begs me to question every form of investment house at the moment. Yes, I know that sounds a bit drastic but that is my initial reaction.
As reported on MyBroadBand.co.za, brothers Ameer Cajee and Raees Cajee of Africrypt are currently missing after informing investors of a hack that took place.
This hack according to them was the cause of about 69 000 coins being lost. Today (24 June 2021), those coins are worth $2 300 046 000.00. The rand value is R32 706 194 110.80.
As noted in the article it is the second big crypto investment house after the Mirror Trading International incident.
Crypto scams are real
These are two of the big incidents that have made the pages of some of the most prominent news websites in South Africa, but there are more if you are to believe every person who claim to have been scammed on Facebook.
In a few groups I am a member of you find people asking about crypto investment and who to use. My observation of the comment section show 3 main groups of people who respond to the questions:
- Crypto is the best thing since sliced bread and you should invest asap
- Crypto is a false currency and you will not make money investing
- Crypto investors are scam artists who stole all their money
The third group is the biggest commentators on these postings. I believe them. I believe that thanks to the current climate in South Africa due to Covid-19 restrictions people are desperate.
For a scammer it is a pretty simple task to put up a professional looking website and promise more than average returns on your investment.
If you are desperate enough you will believe the tale of the golden goose and invest as much as you can. And then they disappear.
Unregulated is the problem
The fact that crypto currencies are not as regulated as traditional currencies like the rand, dollar and euro, means that there are just too many loopholes for scammers and con artists to use.
In contrast, Africrypt and Mirror Trading International have tried to sell themselves as proper investment companies with staff and offices.
It looks and sounds legit since there is some sort of a physical real world presence. Then again, having a physical office does not mean you can simply walk in and demand answers. Google and Facebook have offices in South Africa and getting in there is nearly impossible.
The idea behind crypto currencies is/was that state institutions cannot have control over it and, pardon my French, fuck it up the way they have done with our current monetary systems.
Thus it is not regulated and the systems developed to mine or trade these coins and tokens are the regulation itself.
So in my view this freedom is also its greatest weakness in a way.
What about traditional investment?
I am seeing a lot of ads on websites and Facebook marketing that you can make money by investing in companies like Netflix and Apple.
Yesterday I was watching a marketing video of a South African investing guru we is telling you about the richest people in the world. He name drops Elon Musk as the golden boy of South Africa and Bill Gates.
His whole angle is that you start to follow him to learn in which funds you should invest in. Fund that are tied to investing in these companies.
Now the guy has a nice personality in the videos and he seems likeable. But here is my question… how the fuck do I trust a guy who is advertising with a home made video?
My own investments took a bit of a knock on the growth side during 2020 but at least I could log in and see what was going on. The companies are regulated, they have a proven track record and invest with listed stock. I have that feeling of comfort.
A new trend is companies calling me up asking me if I knew that because of my current investments I am already registered on the JSE and that they can show me how to trade for myself.
Once again it sounds like another scam to me. They make you believe during the cold call that you can make more money if you do it yourself.
DUDE! I do not have the time to do it myself nor the knowledge! That is why I trust people with a proven track record to do it.
I think that some regulation is needed to a degree but there should also be rules to govern the freedoms crypto offers. Until we have reached that maturity in this new line of investment vessels I will not be spending any money with anyone associated with crypto.
I am cautious of crypto scams. Crypto scams are real. But that’s just me.
