South African Regulator Reveals Over 4,000 Citizens Lost $6 Million in Crypto Fraud

South African regulator, the National Consumer Commission (NCC) recently disclosed that it has unraveled a pyramid scheme known as ‘Obelisk’ which is a famous crypto mining company that defrauded over 4,000 citizens about $6 million.

Obelisk is a company that was established by a part of the team that worked on the Siacoin cryptocurrency. The main goal of the Obelisk developers is to build a community where ASIC mining is a preferable way of gaining coins.

After a series of complaints by investors, the NCC disclosed that it had to swing into action by investigating the activities of the company. Noting that most of its victims were gotten from different social media platforms.

Investors on the platform disclosed that they were charged between $18.75 and $24,000 per mining equipment on the platform which the NCC described as an outrageous amount. As if that was not enough, they were also asked to pay a certain initial fee at the point of registration which was undisclosed.

Also, for investors to be able to withdraw their funds, again they are mandated to pay another fee to upgrade their mining equipment.

In all of this, South African Regulator NCC disclosed that the company paid a smaller portion of the investor’s returns on their first investments to convince them to invest higher fees which is a gimmick synonymous with pyramid schemes to lure more investors.

However, problems began when investors discovered that the withdrawal button on their profiles had been suddenly deactivated making it impossible for them to withdraw their earnings.

In a bid to inquire about the issue, they were blocked and removed from the community groups they were added to. Also, the NCC disclosed that WhatsApp groups that investors were added to were estimated to be more than 20.

Investment in the crypto market has been growing across the globe which has also led to an increase in crypto scams and theft, as it was reported that over $10 billion was lost globally in 2021.