South African authorities are exploring a cryptocurrency scam that swindled financial specialists out of 1 billion rand ($80 million) with guarantees of returns that never happened, police said last week. The extortion charges include BitCaw Trading Company.
“BitCaw Trading was not involved in the BTC Global scam, and we are shocked to see our name connected with it,” Andrew Caw, founder of BitCaw Trading, said via Facebook on Friday. “BitCaw Trading assists people with buying and selling bitcoin as well as other bitcoin-related services. We do not manage third-party money or offer any kind of investment, and BitCaw didn’t set up BTC Global.”
South African Police are examining the fraud, which affected over 28,000 investors. “Members of the public are believed to have been targeted as part of the scam and encouraged by agents of BTC Global,” the South African Police said in a statement.
“This may prove to be the tip of the iceberg with potentially thousands more yet to discover they’ve lost money,” said Yolisa Matakata, of the Hawks Police Investigations Unit. “Unregulated, unusual investments at home or abroad come with a high risk that people could lose all their hard-earned pension and other savings.”
BTC Global claims it rendered services after its primary dealer, Steven Twain, neglected to answer to emails asking for installments. Police said the organization focused on potential investors with guarantees of 2% interest per day, 14% per week, and 50% per month. Installments to investors were supposedly made each Monday, until they suddenly stopped. Regulators across the globe are pondering the rise of cryptocurrencies like bitcoin, which draws investors with the promise of exceptional yields that are not upheld by national banks.
“We are as shocked and angry as everyone. But we all knew the risks involved in placing funds with Steven. We all became complacent,” BTC Global said on its website. “Until Steven Twain resurfaces or is found there is nothing the admin team can do.”
The investigation comes after a case this week where kidnappers requested a payment in bitcoin of almost $120,000 to release a South African high schooler.
