Authorities in Egypt have arrested 29 people, among them 13 foreign citizens, on charges of defrauding $620,000 from investors in a digital asset scam.
Known as HoggPool, the project launched in August 2022 and reportedly lured investors through the promise of guaranteed returns. HoggPool claimed to be investing in digital asset mining and trading.
HoggPool’s popularity surged despite Egypt being strictly anti-Bitcoin. The Northern African country’s central bank prohibits issuing, trading, or promoting digital assets, with violators facing a jail term and over $300,000 in fines. The central bank issued a reminder on this law as recently as last September, a month after HoggPool launched.
HoggPool promised investors high profits, starting at 10% daily for investments as low as $10. With Egypt’s economy going through its worst period in a decade, the “guaranteed returns” attracted interest from thousands.
Africa’s third-largest economy has seen its local currency depreciate by nearly 50% against the U.S. dollar in the past year, with half its 104 million citizens estimated to be living below the poverty line.
To further earn legitimacy with Egyptian users, the platform posted a fake license from Egyptian authorities online, local outlets report.
Since it blew up in February, thousands of victims have surfaced online, sharing their experiences. While some only experimented with a few thousand Egyptian pounds, quite a few had invested all their life savings.
Egyptian police have arrested 29 people behind the scam, 13 of whom are foreign citizens from the same country, prosecutors revealed, although they withheld their nationalities.
The 29 were arrested while in the process of launching RIOT, a rebrand of the HoggPool scam, investigators added. They settled on the name RIOT to imply a link to Riot Blockchain, the publicly-listed American BTC miner.
Authorities recovered 95 phones, 3,367 SIM cards, seven computers, 41 credit cards, and EGP600,000 ($20,000).
HoggPool is the latest digital asset scam to target African investors. These scams shot up in popularity a few years ago as digital asset adoption in the continent soared. They have defrauded billions of dollars from investors in Kenya, Ghana, Uganda, Nigeria, South Africa, and other African nations.
AfriCrypt remains the region’s largest scam, with the two brothers behind it reportedly defrauding $3.6 billion from South African investors.
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