Rwanda central bank warns against get-rich-quick crypto schemes

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The Central Bank of Rwanda has warned the public against get rich quick scams which have been on the rise in the country. In a notice posted on its Twitter page, the Banki Nkuru y’u Rwanda (BNR) urged the public to beware of these scams that promise quick wealth in a short period.

The scams can take various forms including pyramid schemes, multi-level marketing schemes or the issuance of a fake initial coin offering, the notice stated. The BNR also highlighted some of the scams in the country including 3 Friends System Group, OneCoin and Supermarketings Global Limited.

The scams require the victim to pay an initial amount for as membership fee. They then promise to pay the victim a certain amount for every new recruit that they bring on board. The multi-level marketing variety of the scam requires the victims to buy some product and then market it, such as medicines or even cryptocurrencies. This is as opposed to the naked pyramid scheme, which doesn’t have a viable product to sell.

These scams are illegal in Rwanda (amongst many other places), the BNR warned stating: “The public is advised to exercise caution and ensure that their investments are with credible and duly licensed deposit-taking financial institutions, asset managers as well as securities brokers.”

The BNR further warned the public that its power is limited and that it can’t protect any person who willingly invests in a pyramid scheme or any other related activity.

Africa has witnessed its fair number of crypto-related scams in the past few years. In March, investors in Kenya fell prey to a Brazilian crypto scam, losing millions of dollars in the process. Velox 10 launched in Kenya with promises of quick riches, requiring a membership fee of US$100 and an upgrade fee of US$200. In return, the company promised its users up to US$4,000 in profits daily. Months later, the company shut down operations and brought down the website, taking off with millions of dollars.

Last year, over 28,000 South African investors lost over US$8 million to yet another crypto investment scam. BTC Global allegedly made off with over 1 billion rand (US$68 million) from the investors in a multi-level referral marketing scheme.