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South African regulator unravels a pyramid scheme

South African regulator

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TL;DR

  • South African regulator unravels a pyramid scheme
  • The platform stole $6 million from its users
  • The regulator plan to continue its investigations

South African regulator NCC has announced that it has uncovered that the famous mining company Obelisk is a pyramid scheme. According to the regulator, over 4,000 citizens invested in the company. The statement also claimed that the cumulative total estimated in the loss is presently about $6 million. Obelisk is a Bitcoin mining company that supplies mining and data centers with the equipment for mining digital assets.

Obelisk stole an estimated $6 million from its users

According to the South African regulator, it started to look into the firm’s activities after a series of complaints from investors. In the complaints, the regulator claimed investors were angry that the company refused to back up its claims of paying them rewards. In a breakdown of the statement, the regulator claimed that the platform told the investors that any payment they make to the platform would be towards our chasing their specialized mining equipment.

With this, they could generate income daily, which would be paid back at intervals. According to the investors, the platform charged between $18.75 and $24,000 per mining equipment on the platform. The South African regulator claimed that the platform got most of its victims across various social media platforms, including Facebook.

South African regulator plan to continue its investigation

The modus operandi of the pyramid scheme was to make direct advertisements into the private messages of its victims across social media platforms. After that, they would ask them to pay a certain initial fee at the point of registration. The investors are again mandated to pay another fee to upgrade their mining equipment to be able to earn more before they withdraw their funds. The watchdog also claimed that the company paid a smaller portion of the investor’s returns on their first investments to convince them to invest higher fees.

However, problems soon started after most investors discovered that the withdrawal tab on their profiles had been deactivated. Upon asking about the issues from those at the top, the investors were blocked off the platform and removed from the community group to that they were added. The South African regulator claims that only 25 users have complained about the issue for now, but they believe the estimated total could reach close to 4,000. Also, the various WhatsApp groups that the users were added to were estimated to be more than 20, making the total figure that the scammers might end up stealing around $6 million.

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Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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