Uganda crypto scam leader arrested

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Police in Uganda have arrested the leader of cryptocurrency scam Dunamiscoin that defrauded over 1,000 investors and employees. The director was arrested last week and is due to appear in court this week. Police are on the hunt for four others.

The director, Samson Lwanga, was arrested near the crypto scam’s offices, a report by Daily Monitor revealed. According to the Kampala Metropolitan police spokesperson, Lwanga has been cooperating with the police.

For the investors, the spokesperson had some good news:

“According to him (Lwanga), they are willing to refund the money, but the problem is that Financial Intelligence Authority froze their accounts. And they cannot access or withdraw any money. We are going to get in touch with Financial Intelligence Authority to prove if what Lwanga is telling us is true on freezing the accounts.”

The report also revealed the extent of the scam, and it’s much bigger than previously thought. Dunamiscoin Resources Limited had over 1,000 victims, all of whom were registered during a victims’ meeting last week. The report says the number could be much bigger, with some insiders placing it at over 10,000. The scam made off with UGX 2 billion ($2.7 million) from these victims.

Victims’ lawyer, Arthur Mpeirwe said the company still holds enough money to pay them off. He reportedly contacted the Bank of Uganda to confirm if the company did indeed have bank accounts as it claimed. He had also received word from one of the banks where it held an account revealing that Dunamiscoin had $2.7 million in its account, incidentally the same amount of money the victims lost.

The scam worked like a pyramid scheme, paying off its earlier batch of clients with money collected from later clients. On its website, it stated, “Enjoy the boom in the cryptocurrency market, earn an amazing 30 per cent in 21 working days as returns on your partnership with us. A special offer of 40 per cent for 2 million shillings and above.”

Those who received the promised payout ended up investing even more money in the scam. They also acted as brand ambassadors, bringing in many more. One of the victims narrated:

“I started with Shs5m as deposit in July. And after 21 days, they gave me Shs7m. We agreed with my wife to withdraw our savings from other banks and we started investing in Dunamiscoins. The business was good until my wife called me on Tuesday informing me that Dunamiscoins had closed all its premises. That’s when we realised they had duped us.”

Dunamiscoin is just the latest crypto scam in an African country. With cryptos becoming ever popular in the continent, more fraudsters are duping gullible investors and taking off with their money. As CoinGeek reported, these scams have been widespread, with Kenya, Ghana and Nigeria having some of the most prominent cases.