Kenya has witnessed a significant surge in crypto mining Ponzi schemes in the past few years. Many unsuspecting Kenyans, especially young people, are losing their hard-earned money. GHash Mining is the latest scheme to rob millions of shillings from Kenyans wishing to get rich quickly.
How It Happens
Like other Ponzi schemes, the crypto mining apps lure unsuspecting people to invest their money on the premise they would earn high-interest rates of up to 300% after a few days. Primarily, investors are required to rent a “mining machine” by depositing funds into their accounts.
Victims of these platforms are invited by family members or friends. Participants are also promised higher returns as they recruit more into the scheme.
The platforms work well in the early weeks, and the investors who join early enough receive the interest payments as promised. But there is a catch. Investors receive their earnings 72 hours after the withdrawal is initiated. Moreover, investors cannot withdraw above a specific daily limit. The 72-hour period allows more investors to be conned into joining the scheme, and their investment is used to pay old members.
The final straw comes when scammers ask investors to recharge their accounts in order to make withdrawals or to earn 345% ROI. In most cases, investors are coerced to deposit money, or their account is frozen after a few hours.
Without suspecting foul play, many oblige and recharge their accounts as requested. After this, the founders post cryptic messages on social media platforms, mocking the investors. Victims lose contact with the scammers as the platform is deleted from the internet without any notice.
Making it Appear Real
The scammers’ first task is to build the credibility of their platform. In most instances, the crypto mining platforms bear the names of actual crypto mining companies in Europe. For instance, Ghash Mining posed as a subsidiary of GHash.io, a Netherlands-based bitcoin mining pool that operated between 2013 and 2016.
To gain the trust of potential investors, the scammers also recruit Kenyans as mentors and administrators. The admins rally new registrations through WhatsApp, Telegram, and other social media platforms. The Kenyan agents hold workshops to train members on how and when to trade. But, not a single mentor or administrator knows who their boss is.
Scammers, through their local administrators, engage in charitable activities. Photos of administrators participating in charity events at children’s homes dominate the scammers’ social media platforms. Their goal? Gain the trust of unsuspecting Kenyans and exploit the bond to trick them into the investment scams.
What makes Kenyans Vulnerable?
Crypto mining scams and other Ponzi schemes are so prevalent in Kenya for several reasons. First, the high unemployment rate in the country makes Kenyan easy prey for scammers.
The youth unemployment rate in Kenya is as high as 16.9%. In addition, the poor economy, lack of information, and lack of proper legal framework for consumer protection make Kenyans vulnerable to investment scams.
