Hundreds left reeling after crypto scam crashes

IOL Published May 20, 2023

Cape Town – A CRYPTOCURRENCY scam has plunged scores of “investors” across the country into deep financial trouble after it abruptly closed down.

Cryptocurrency is a digital payment system that does not rely on banks to verify transactions.

The Planet Mining Pool (PMP), which described itself as a leading global one-stop blockchain cloud mining platform, is now accused by “investors” of scamming them out of “substantial” amounts of money.

It closed down its platform a few weeks ago, leaving thousands of people devastated.

One of the company’s offices in Klerksdorp, North West, was closed and deserted with one employee saying the owner owed them and the mall authorities money.

A Western Cape victim who didn’t want to be identified said: “I used my last money to better my living conditions. Now I lost everything.”

He was forced to close down his business as a tour operator in Namibia and returned to South Africa during the Covid-19 pandemic.

“My niece introduced me to PMP in March 2023 and she showed me proof of money she received.

“Last month she received R80 000 and she reinvested it.

“Three days later, the app was down. Now all that money is gone.”

Although some of the victims would not disclose the amount of money they lost, they said it was “substantial”.

Investors were encouraged to buy mining machines, from R375 each which in 20 days would yield about $30 or a set amount of R750, regardless of the currency exchange rate.

“The bigger the machines, the higher the risk,” the victim said.

One investor estimated the number of victims could run into tens of thousands.

“When we tried to trace these people, our investigation led us to the United Kingdom, Nigeria and Dubai,” said the investor.

“No-one knows who these PMP people are.”

Three other victims based in Cape Town and Heidelberg, Gauteng, told the Weekend Argus they were left traumatised.

“I invested R157 000 and on 4 May the system crashed and my money was gone,“ said the Heidelberg victim.

“It was a gamble I took because it was too convincing.”

Another Cape Town victim who only identified herself as Amanda said she and her brother invested R18 000 and R48 000 respectively.

“I wanted to pay for my studies,“ she said.

“Now my dream is slipping away before my eyes.”

Another victim who ran one of the Whatsapp groups for PMP and only identified herself as Kim, posted a video on TikTok in which she distanced herself from the owners.

“I was teaching people how to use the app,“ she said.

“I believed everything they said. I made some money but I got greedy.

“I invested it back, now PMP has run away with the money.”

The victims said lodging a criminal case would be fruitless as there was no paper trail and that they were turned away while others did not bother.

The Financial Intelligence Centre (FIC) said due to the decentralised and anonymous nature of the schemes, crypto currencies were the preferred currency of hackers and scammers all over the world.

“Funds acquired in this way can be sent abroad quickly with limited oversight,“ it would the Weekend Argus.

“Cryptocurrencies are especially attractive to scammers for three main reasons, namely lack of a centralised authority; transactions are irreversible as well as the ability to be almost anonymous”.

In the case of PMP none of the investors knew who was behind it, and the worker at the Klerksdorp office, known only as Dee Nceza, said she never met her employer and only heard it was a “Chinese man“ who later was rumoured to be Nigerian.

The FIC said while the pandemic forced most people to work remotely and rely on the digital economy to transact, it was assumed these types of schemes became increasingly prevalent.

The centre urged potential investors to ensure those offering such schemes were registered as financial services providers with the Financial Sector Conduct Authority and the National Credit Regulator.


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