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Investors lose $10M+ in Bitstream Ponzi scheme

Investors lose $10M+ in Bitstream Ponzi scheme

Last updated 29th Jun 2022
Disclosure
  • The investors in the fraudulent scheme can’t withdraw funds now that it has collapsed
  • Alleged Ponzi scheme was registered in November 2021 in the U.K.
  • 10 million USDT transferred to an address controlled by the scammers

Investors are believed to have lost more than $10 million in the alleged cryptocurrency Ponzi scheme called Bitstream Circle, Bitcoin.com reported. The scam became obvious on March 13, 2022, when some of the investors in the scheme reported having issues making withdrawals.

They were warned

A platform called Techspace Africa had warned Kenyans about Bitstream Circle. Before it emerged as a Ponzi scheme, they referred to it as “yet another elaborate scheme targeting young people looking to get into the cryptocurrency scene.” The platform wrote in a blog post on March 14:

As expected, we received major backlash from ‘investors’ who called it legit, however, these same Kenyans will wake up to a collapsed Ponzi Scheme today.

Scheme accumulated 11K members in 4 months

One report maintains that the alleged Ponzi scheme was registered in November 2021 in the U.K. Its name was Bitstream Circle Limited. The director was listed as one Quin Yang, a national of China. The report adds that more than 11,000 people signed up in less than four months. They came from a total of seven countries.

Apparently, most victims were lured by the promise of a daily ROI in the range of 5%-8%.

$120M lost to similar scams in one year in Kenya

Recently, a Kenyan government official reported Kenyans had lost $120 million to crypto scams in the past fiscal year. This failed to deter Bitstream Circle’s early investors, who wrote these allegations off at first.

The first signs of the scam

Many investors started having problems withdrawing a week ago according to a report published by Kimani Capital on LinkedIn. Initially, this was accounted for by a network upgrade, a message from the administrator of Bitstream Circle’s Telegram channel stated. They added the upgrade would take 5 hours, after which they could withdraw funds again. However, this did not happen.

The investors in the fraudulent scheme can’t withdraw funds now that it has collapsed. It has been reported that the masterminds behind the scheme have made off with more than $10 million in digital assets.

The role of FOMO and greed

Nobody in the world is immune to FOMO and greed. It became apparent the criminals had stolen the money after Kimani Capital reported that over 10 million USDT stablecoins had been transferred to an address supposedly controlled by them.

On Twitter, users shared screenshots showing one of the masterminds gloating and mocking the victims. One of them, a Twitter user called Victor Kigen, tweeted:

As Kenyans, we should desist from entering this get rich quick scams. There is no easy way to make money. You have to solve a problem for your bank account to increase. Now, I'm not an angel, I invested in this and I've have had a sleepless night trying to deny this is happening.

Buying crypto from a trustworthy exchange is of paramount importance. Never invest more than you can afford to lose.

Daniela Kirova

Daniela Kirova

Daniela is a writer at Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. She has over 15 years of experience as a writer, having ghostwritten for several online publications in the financial sector.