According to the National Consumer Commission, about 4,000 South Africans who invested in a bitcoin mining equipment supplier, Obelisk, may have participated in a pyramid scheme. The commission said participants in the pyramid scheme may have lost as much as over $6 million.
Obelisk used social media platform to lure victims
The National Consumer Commission (NCC), a South African consumer watchdog, recently announced that Obelisk – an alleged bitcoin mining equipment supplier – is actually a pyramid scheme that duped millions of dollars from unsuspecting investors. The watchdog reportedly made the announcement after receiving complaints from investors who accused Obelisk of fraud.
According to a Businesstech report, the 4,000 individuals who participated in the investment scheme were convinced they were purchasing bitcoin mining equipment which could generate constant income for them. The machines cost between $18.75 and $24,850, the report added.
In a statement, the commission revealed that the obelisk had lured victims through social media platforms such as Facebook:
Participants were recruited on social media platforms, such as Facebook, where they were required to make a minimal investment. Upon joining and making an initial investment, they were added to different Obelisk Whatsapp groups.
The watchdog said smaller returns were given to persuade some investors to invest more.
Residents Warned Against Falling for Scammers’ Tricks
However, problems soon started when investors could not make withdrawals. The report alleges that individuals who confronted the operators of the scheme were blocked and subsequently removed from the Whatsapp groups.
The NCC reportedly confirmed it had received 25 complaints from investors who claimed to have incurred a loss of $41,400. However, the watchdog believes that “4,000 participants from eight WhatsApp groups” may have lost the equivalent of $6.18 million.
According to Thezi Mabuza, the NCC’s acting commissioner, South African residents must avoid being tricked by investment schemes that promise significant returns in a very short space of time.
“We ask the members of the public to save themselves from heartache and agony for not getting involved in these deceptive schemes. History is replete with many examples of these schemes that inevitably collapsed, often leaving a trail of financial crisis, broken trust, friendships and even broken families,” said Mbuza.
