Another day, another “Zimbabweans lose millions of USD in a Ponzi scheme” headline. This time the relatively new cryptocurrency scam struck to the tune of over USD$5 million.
What happened this time?
Martin Mhlanga (the schemer) is sitting pretty somewhere after promising his victims fantastic returns on their investments and then failing to deliver.
Mhlanga presented himself as a bitcoin guru who could navigate the cryptocurrency and stock exchanges so divinely he could double any amount in as little as a month in some cases.
He naturally incorporated a Crypto Share Investment Scheme and raised capital from desperate Zimbabweans and was supposed to set about making everyone rich. It didn’t quite work out that way. The money is gone and he needs more money to be able to get it back. That is probably another lie.
Martin of course is not the only such one-of-a-kind investment maestro out there. There are many other Crypto Share Investment Schemes being run by gurus cut from Martin’s cloth.
Some ‘investors’ in these other schemes are sweating right about now. Unfortunately, they can sweat blood but the game was rigged from the start, they were fattened for slaughter. Those who joined early on and were restrained in their investments will probably come out okay, like in all pyramid schemes.
The rest will have to accept their losses, learn from the experience and move on with their lives. What is sad is that some will defend their Crypto Share Investment Scheme, claiming the one they joined is run professionally unlike the Martin one. They will continue ‘investing.’
No laughing matter
It seems with every reported scam, empathy levels for the victims drops. We all feel like, ‘really? People have fallen for this again?’ We feel it serves them right for chasing get rich quick shortcuts. We need to shake ourselves and stir up the sympathy. These are crazy times we live in.
There will be no sympathy until we understand why this keeps happening. Then it is up to us to help those more susceptible to these scams.
Why these scams work in Zim especially
Zimbabwe has not been the land flowing with milk and honey that we hoped we had established. We have been in economic turmoil for decades and the light at the end of the tunnel has been affected by the load-shedding, it’s off.
When all seems bleak any positive prophecy is lapped up. Hope is a strong drug. These scammers promise a way out of the rather dire situations we find ourselves in.
So, it is no wonder some of us want the promise to be true so bad they suspend their critical, rational brain and choose to believe. After all, the alternative is accepting that one is probably never going to escape the crippling poverty and abject despair. Who wants to accept that?
An excessive desire for wealth is sure to blind a person. Every single one of us would like to be rich a la Strive Masiyiwa. For some this wish becomes an obsession to the point of brushing away any warning signs that a would-be saviour is a wolf in sheep’s clothing.
It is no coincidence that these schemes sprung up when bitcoin made its historic rise to around $50k a pop.
When you can’t admit when you do not understand something you become vulnerable to being misled. You’ll just nod along to anything just so you do not appear ignorant or stupid.
This was and is a huge factor in the Crypto Share Investment Scheme world.
Some would not admit they did not know what bitcoin or how it worked. They were shown graphs showing upward trajectories, had new jargon thrown at them and they pretended they knew what was being talked about. They then ignored the warnings they got.
Lack of knowledge / Misplaced trust
None of us knows everything. Taking time to get at least a basic understanding on any investment opportunity before committing our hard-earned savings should be a must.
Some were not pretending to understand cryptocurrency but just trusted the family/friends who referred them to the Martins of this world.
How to help those still falling for this scam
Knowledge is power goes the cliche. So for these Crypto Share Investment Schemes we can turn to what they already know to help explain things.
Cryptos are like forex or shares
We should understand that crytpocurrencies like bitcoin have a value which is not determined by any single person. Just like shares or forex. So no guru can determine what the value is going to be in the future. The value does rise and fall as the market forces determine.
The best we can have are educated guesses but these are sketchy because cryptos are even more volatile than shares or forex.
Having understood that, we can see how ridiculous it would be for someone to promise a fixed return as high as 100% from trading a volatile crypto which rises and falls as it pleases. Unless what they are saying is that they can divine the future.
The best investors hardly crack 20% in the best of years
The top hedge funds in the world, run by the real gurus returned 11.6% on investments in 2020. Return on holding in shares of the 500 largest companies in the US (S&P 500) returned an impressive 16% that year. Our inflation affected ZSE recorded a 92% return which was impressive though with caveats.
These returns were celebrated and yet they are not anywhere close to the 100% return a month that crypto scammers promise. How are they better than the best and still be requesting my US$100?
When forex traders were interviewed, only a quarter of them believed they could make 10% a month. So again we wonder, what are the Martins of the world actually trading in that could provide such high returns.
Let us help our fellow brethren by giving them enough information to be able to spot the kinds of scams that have robbed them of millions over the years.
We cannot continue mocking and ridiculing them. After all, we are all susceptible to scams, it’s just that different scams work on different people.
So help someone today, share this information with them.
3 thoughts on “Enough with the crypto scams already, help prevent them”
Yah we’re tired of these scams. We’ll surely play our part.
I have seen a draft bill on crypto making rounds on whatsapp,can you cover that in laymen’s language.
Yeah, vanhu vakawanda varikunyura apa. Pane kambani inonzi BITFOREXMINER. It’s British registered. Ndakavingwa kuinbox nemumwe munhu akazviti anonzi Lerato Grace. I didn’t fell into the trap coz I have enough knowledge about it. The person told me that I will buy BTC with our local currency, invest it into the company then the company will use the BTC I have invested to mine BTC. That’s rubbish… I asked that “HOW WILL THEY MINE THE BTC I HAVE ALREADY GIVEN THEM”
If we get to consider the definition of BTC mining, it sounded worse than animal sh*t. What I am saying is if had no knowledge probably I would have been scammed. So be careful, knowledge yakazara painternet, just purchase your bundle and get the knowledge for free.