Dunamiscoins directors charged with crypto fraud in Uganda

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The executives of a controversial alleged crypto scam have appeared in court in Uganda, on dozens of counts including obtaining money by false pretense.

The latest fraud to afflict the cryptocurrency sector, Uganda-based Dunamiscoins was the subject of 4,000 complaints to local authorities following its unexpected collapse in December.

The directors of the now-defunct Dunamiscoins Resources Limited appeared before a judge earlier this week, with the magistrate reading some 65 counts against the firm, The Observer reported.

Among other charges was conspiracy to commit a felony, contrary to the penal code.

The suspects are said to have scammed between Shs500,000 and Shs140 million, across dozens of investors unaware of the scam.

Like so many crypto investment scams, Dunamiscoins lured in investors with unrealistic promises of excessive returns. Operational between February 14, 2018, and December 3, 2019, the scam is thought to have had multiple thousand victims.

The central premise for investors was an offer of 30% returns in 21 days, which of course cannot be guaranteed in any asset class.

The lead plaintiff Haruna Asiimwe said that this was offered to investors to entice them to part with their capital, and that there was significant shock and panic when the firm was found to have closed its doors in December 2019.

Local police issued a statement saying those affected would be able to get their money back from the company, with the scammers cooperating with authorities to refund affected victims.

However, several key bank accounts belonging to the scheme are still in lockdown by order of the Financial Intelligence Authority.

The case is a reminder of the need for investors to be cautious with cryptocurrency investment schemes. While speculation on crypto assets is possible, the high risks and price volatility of most make it impossible for anyone to guarantee returns at any level.

Yet crypto scams continue to rise worldwide, affecting an ever-growing number of unsuspecting victims.

The suspects were arrested last December 10. Dunamiscoins operated branches out of Masaka, Kampala, and Mbale.

Enquiries into the scam company are still ongoing.