How to Protect Yourself From Scammers


The popularity of blockchain and cryptocurrencies, especially Bitcoin, is growing at an extremely fast pace in Africa. This exciting technology has a lot of potential for increasing access to finance and making it easier to do business across borders. But any success story can also attract bad actors. Just like the scammers that regularly show up on your phone asking for mobile money, there are now many scammers asking people to participate in their crypto schemes. These scammers promise people fast money and disappear quickly thereafter. People hear stories of how others have become rich through bitcoin or cryptocurrency, and they also want to be rich. However, most of the time, if it sounds too good to be true, it probably is.

At BitPesa, we want to ensure that our customers are protected from such scams, even when those scams pretend to associate themselves with us. BitPesa is regulated under the UK’s Financial Conduct Authority and takes its compliance very seriously, so we would never associate with any kind of pyramid or Ponzi schemes. If you are in doubt, and they are directing you to our website, please reach out to BitPesa customer service and we are happy to verify any association with us.

Different Kinds of Scams

There are many different kinds of scams, including Ponzi and pyramid schemes.  However, what they all have in common is too-good-to-be-true returns, a lack of specificity about the investments, and the need to keep promoting the original investment.

In a typical Ponzi scheme, fraudsters often promise an incredibly good return from investing, involving unregistered investments. However, they did not really invest in anything. Instead, they simply seek new people to put money in, which they use to pay back the previous people who invested first. Ponzi schemes are built on the ability to keep finding new people to put money in, and therefore collapse in the long run as a result. You have to understand your investment before you decide to put money into it. On the other hand, in pyramid schemes, the newer recruits pay previous recruits for the ability to promote and sell an often nonexistent product or investment. These schemes are usually built on needing to find more and more people to invest. Another common scam is the advanced free scam, which usually occurs when someone asks you to invest in certain things and pay fees upfront.

What are some examples of scams with Bitcoin?

In recent news, South Africa is investigating BTC Global for an $80 million crypto investment scam. BTC global representatives made promises of earning 2% per day, 14% per week, and 50% per month. In the beginning, certain investors were able to receive returns, but after a while, the payments have stopped. Later on, people discovered the scheme and contacted the police.

Chinese law enforcement cracked down a $13 million pyramid scheme purporting to be a blockchain project. The company first founded the peer-to-peer blockchain platform, then claimed itself as a ‘blockchain’ and ‘big data company’ with high potential growth. The fraudster created a five-tier hierarchy model by buying into different membership levels, which the investors will gain certain returns in shares. China’s Ministry of Public Security detected the pyramid scheme and arrested the fraudster early this year.

Oftentimes, the scammers are able to convince the victims of the value of the investment, and the victims help recruit other victims.  Even if it is a friend or someone you trust who is coming to you with this kind of investment, you should still do your own research and understand the investment fully.

How can you protect yourself against scams?

Do your homework:

  • Does Google instantly fill “scam” when you search?
  • Is it hard to establish the founders?
  • Is there a clear and easy way to contact the organization?
  • Does the website look professional?
  • Be alert to unusual payment methods and investments that cannot provide receipts

Keep your details and devices secure:

  • Do not share your account with other people
  • Try as much as possible to be informed and learn to transact yourself
  • Make sure requests for your information are legitimate. Always be alert to scams during phone calls, email, social media, and face-to-face encounters.
  • Be very careful with email and take steps to ensure it is from the person it claims to be from, especially when it involves a request for money. You can contact the sender on a separate medium to be sure. Double-check email addresses and do not click on suspicious URLs or attachments.
  • Do not share your passwords or financial information
  • Do not click on strange links that promise free money on social media or messaging apps.
  • If you have been conned, please don’t keep it a secret. Share to prevent other people from falling into the same trap.

Stay alert!

As always, if you have any comments or questions, talk to us. 

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