Crypto Pyramid Scheme in Uganda Steals Employees’ Money and Closes

An alleged cryptocurrency pyramid scheme in Uganda has fled after defrauding dozens of victims that invested in and worked for the scheme.

Dunamiscoins Resources Limited opened in Masaka last month and started inviting individuals to invest and become part of its “digital currency network,” independent Ugandan newspaper Daily Monitor reports Dec. 5. The firm’s offices closed down covertly just a month after opening, with employees reportedly coming to the office to find it empty.

Dunamiscoins required employees to pay to start work

A businessman who worked next to Dunamiscoins’ closed offices reportedly said that Dunamiscoins was convincing people to join its firm by promising 40% returns on cash investments. According to the witness, the firm was apparently working with money transfer companies in the city to recruit new people to the scheme.

Additionally, Dunamiscoins allegedly asked each applicant to pay 20,000 Uganda shillings ($5) to register with the company. According to a former Dunamiscoins salesperson, the firm promised high returns on investments but fleeced its employees of money paid for registration as well.

Daily Monitor attempted to get in touch with Dunamiscoins but none of the phone numbers obtained by the publication was available, the report notes. Cointelegraph reached out to an email address mentioned on Dunamiscoins’ website only to receive a notice that the listed address couldn’t be found.

The report follows a recent announcement by the deputy governor of the Bank of Uganda that online cryptocurrency businesses are not regulated in the country to date. In June 2019, the official warned the public on the limited protections offered them when they invest in unregulated cryptocurrencies, also outlining a number of risks associated with crypto trading and adoption.

Source Cointelegraph

Thai Police Arrest 24 Chinese Nationals for Alleged Bitcoin Scam

Thai immigration officials have arrested 24 Chinese nationals who were running an alleged cryptocurrency scam call center in the Rama III neighborhood of Bangkok.

According to an official announcement on Dec. 2, the Immigration Bureau of the Royal Thai Police arrested 24 individuals, seized 61 laptops, 424 mobile phones and several routers. 

The Immigration Bureau further states that the head of the operation would hire employees on three-month contracts, wherein all their expenses were paid including a 5,000 yuan ($710) monthly salary. After arriving, workers would surrender their passports to the head of the operation. Employees would work shifts from 9 a.m. to 10 p.m. 

The alleged scammers would lure Chinese investors to buy Bitcoin (BTC), ostensibly fudging rates in order to make a profit.  

Thai police target telephone scams

Local news daily Chiang Rai Times states that the Immigration Bureau has busted a number of call center scams operated by Chinese nationals. Earlier today, Immigration police raided a stock speculation scheme run by Chinese teenagers. 54 minors were reportedly arrested at a Thai resort hotel for duping Chinese-based investors into investing in bogus stocks. 

Scammers reportedly had a target to raise 5 million Thai baht ($165,000) from investors that they met in internet chat rooms. Police are still in pursuit of the operation’s organizer who, like the head of the purported Bitcoin scam, is in possession of the employees’ passports. 

Crypto trading comes with caveats in Thailand

While trading cryptocurrencies in Thailand is legal, the country has a regulatory framework and compliance standards for the industry.

Both the issuance of tokens and the trading of cryptocurrencies in a secondary market are regulated by law under a series of decrees. In cryptocurrency exchanges, acceptable trading pairs for cryptocurrencies are either the country’s fiat currency, the baht, or cryptocurrencies which have been approved by the Thai Securities and Exchange Commission. 

Additionally cryptocurrency-related business must be considered a financial institution under the country’s Anti-Money Laundering, Countering the Financing of Terrorism and Know Your Customer Regulations.

As Cointelegraph recently reported, lawmakers in Thailand plan to reform cryptocurrency laws amid concerns that such regulations make the country uncompetitive.

Source Cointelegraph

Researchers Detect New North Korea-Linked MacOS Malware on Crypto Trading Site

Security researchers have discovered a new cryptocurrency-related macOS malware believed to be the product of North Korean hackers at the Lazarus Group.

As tech-focused publication Bleeping Computer reported on Dec. 4, malware researcher Dinesh Devadoss encountered a malicious software on a website called “,” that advertised a “smart cryptocurrency arbitrage trading platform.” The website did not cite any download links, but hosted a malware package under the name “UnionCryptoTrader.”

Linkage to North Korean hackers

According to the researchers, the malware can retrieve a payload from a remote location and run it in memory, which is not common for macOS, but more typical for Windows. This feature makes it difficult to detect the malware and carry out forensic analysis. Per VirusTotal, an online service for analyzing and detecting viruses and malware, only 10 antivirus engines flagged it as malicious at press time.

After conducting an analysis of the newly detected malware, security researcher Patrick Wardle determined “clear overlaps” with malware found by MalwareHunterTeam in mid-October, which purportedly led to the Lazarus group. At the time, the researchers detected that Lazarus had created another malware targeting Apple Macs that masquerades behind a fake cryptocurrency firm.

Recent North Korea-related developments

In recent months, there has been plenty of news about North Korea-related developments. In late November, United States prosecutors announced the arrest of Virgil Griffith, who allegedly traveled to North Korea to deliver a presentation on how to use crypto and blockchain technology to circumvent sanctions.

Following the arrest, Ethereum (ETH) co-founder Vitalik Buterin declared his solidarity with Virgil Griffith, having supported a petition to free the blockchain developer.

The United Nations Security Council’s Sanctions Committee on North Korea accused the country of using a Hong Kong-based blockchain firm as a front to launder money. 

Source Cointelegraph

Alleged Asian Exit Scam to Blame for Market Decline?

In the last week of November, the saga of an alleged crypto Ponzi scheme that has been lingering for more than half a year took a new turn. A hobbyist blockchain researcher reported on Twitter that he’d tracked almost 200,000 BTC that had gone missing over the summer, when several million people invested in PlusToken — a South Korea-based exchange and a high-yield investment program — found themselves unable to withdraw their money. 

The researcher suggested that the embezzled funds have been gradually dumped on crypto exchanges, potentially suppressing Bitcoin market price. Here’s what is known about the monumental scheme that has yet to be officially confirmed.

The greatest exit scam in history

The story of PlusToken is a testament to the fundamental disconnect in contact between the Asian and Western crypto spaces. The platform is believed to have been holding almost $3 billion worth of assets like Bitcoin, Ethereum and EOS when it essentially went bust in June 2019 — and yet, it was not until Aug. 13, when blockchain analytics firm Ciphertrace published its Q2 report, that the story caught the Western audience’s attention.

Even after the true scale of the scheme became evident, it seemed that the collective West was getting updates through a rather narrow bottleneck. Dovey Wan, founding partner of blockchain investment company Primitive Ventures, has become a key source of information on the alleged scam.

Related: What Are the Biggest Alleged Crypto Heists and How Much Was Stolen?

Launched in May 2018, PlusToken offered both a wallet service to store cryptocurrencies and an investment program promising high monthly returns on stored funds, between 8% and 16%. It was primarily marketed in China and South Korea, although Wan reported that the exchange’s customers were also located in Europe and even North America. While the operation boasted a user base of ten million, Ciphertrace estimates that up to 3 million people may have been invested.

The scheme reportedly targeted a mainstream audience of people not particularly savvy with crypto, emphasizing the “educational” component of the operation, which came down to teaching new members how to deposit funds via the PlusToken app. 

A telltale sign of a Ponzi scheme was also present: The size of rewards was contingent on recruiting new investors. Members could progress through the internal hierarchy accordingly, earning honorable distinctions such as “Big Boy” and “Great God.” The aggressive expansion campaign also partly relied on lively offline gatherings.

In late June, customers learned that withdrawals via the app were frozen. Around the same time, law enforcement in Vanuatu took action to detain six people involved with the scheme. An announcement immediately appeared on the PlusToken website, stating that the arrested individuals were regular users and not co-founders.

While the six allegedly high-ranking members of the operation found themselves in custody, other purported PlusToken bosses, including a Korean and a Russian, remained at large. The whereabouts of almost $3 billion worth of cryptocurrency remained opaque as well.

Money on the move

On Aug. 14, news emerged that the funds associated with PlusToken were being moved to exchanges. Wan was the one to raise the alarm, citing research by security audit firm PeckShield. A few days later, crypto watchdog Whale Alert pointed to four transactions totaling almost 23,000 BTC that were likely PlusToken proceeds. 

However, both claims lack conclusive evidence. Ciphertrace, for instance, refrained from publicly acknowledging that the addresses identified by PeckShield may have belonged to the operation.

On Aug. 23, blockchain research firm Elementus suggested that large sums of Ether associated with the alleged exit scam were also transferred to exchanges, predominantly Huobi. Yet, after this uptick in research and media attention, the issue seemed to have gradually faded from the spotlight.

Related: Criminal Activity in Crypto: The Fact, the Fiction and the Context

Three months later, what can be made out of the new wave of media attention to the matter? Granted, it was not until late November that members of the crypto community first came to suspect that the spoils from the PlusToken scheme could exert considerable selling pressure on the market. According to reports from sources versed in Chinese trader circles, the narrative of the swindled funds’ sell-off driving the Bitcoin price downward has been circulating since at least mid-August.

What’s new is a piece of solid-looking research that emerged in the wake of the latest downward turn in the BTC price cycle. Conducted by a crypto enthusiast who goes by Ergo on Twitter and Medium, the analysis connects some dots in the PlusToken plot by tracing the funds allegedly associated with it and estimating the average pace at which they get dumped into the market.

Coins poorly mixed

Although Ergo presented his recent findings as a series of tweets rather than a more formal writeup, the inquiry builds on the analyst’s previous work reported in a Medium post that appeared on Oct. 23. 

The post is a record of the suspicious large-scale activity that the author observed between early August and mid-September. Someone had been depositing huge amounts of Bitcoin into the privacy-focused Wasabi wallet service, which allows several users to mix their digital funds in a single transaction, thus obfuscating the origin of individual coins. Some of the addresses could be traced to individuals already linked to PlusToken.

The analyst described what he saw as “Sybil behavior,” as opposed to a Sybil attack. In both cases, the basic mechanism is that one entity poses as many different ones. If malicious intent toward the service informs such actions, they qualify as an attack, but in this instance, the whale was merely using multiple mixing clients to create the appearance that the money came into a mixer from multiple users. In an attempt to further becloud transaction history, the people in control of the money flows also employed a distinct algorithmic technique known as “self-shuffling.”

According to Ergo, however, “self-shuffling” is actually a traceable process, and the Wasabi mixing was poorly performed, leaving identifiable trails in the form of recurring patterns of post-mix spending. By late October, the researcher was able to track some 54,000 out of the alleged 200,000 BTC linked to the PlusToken scheme that were mixed using these two techniques. The bulk of this sum then went to the Huobi exchange.

Further developments

The tweetstorm that came a month later reports the findings of the continued research effort. Ergo had tracked several more clusters of Bitcoin allegedly linked to PlusToken, bringing the uncovered money total to 187,000 BTC — a figure approaching the estimate of the filched funds.

Assuming early August as the starting point of the sell-off, he also estimated the consequent daily excess of Bitcoin at an average of 1,300 BTC — an amount that looks substantial enough to exert downward pressure on the cryptocurrency’s market price. A few days later, Ergo followed up with an observation that some of the alleged PlusToken-related coins were being further moved from Huobi to Gemini.

One thing that this remarkable investigation falls short of, however, is doing away with what is alleged and instead stating facts before any reference to PlusToken is made in relation to the tracked funds. The starting point of the analysis is a handful of addresses that are widely believed to belong to the PlusToken operation, yet there is neither conclusive evidence nor a firm consensus that this is the case.

Moving from the realm of the probable to a firmer factual ground would require a new piece of indisputable evidence coming to light, most likely originating from law enforcement. For now, the analysis conducted by a lone crypto enthusiast is likely the best the community has to offer in the way of understanding what really happened behind PlusToken’s shiny facade.

Source Cointelegraph

Disgruntled Investor Sues Stox Prediction Market and Founder

Israeli crypto entrepreneur Moshe Hogeg and his blockchain firm Stox (STX) are facing a lawsuit from a disgruntled investor in the United States.

A Vancouver-based investor has accused Hogeg of major breaches of contract and alleged fraud that caused him losses of at least $430,000, according to a lawsuit filed Nov. 25. The complaint is filed with the United States District Court for the Western District of Washington.

In the 43-page lawsuit, the plaintiff Sean Snyder claims that the company failed to perform its obligations under its whitepaper by issuing a larger amount of tokens than originally announced and eventually causing a significant loss in the value for its digital currency. Specifically, the defendants allegedly flooded the market with 16 million STX out of all 43 million STX in circulation, the plaintiff says.

According to Snyder, Hogeg and other involved defendants are responsible for defrauding global investors of “hundreds of millions of dollars.”

Founded by Hogeg, Stox is an open-source Ethereum (ETH)-based prediction market platform. Alongside Stox, Hogeg is involved in multiple crypto-related ventures as he founded major blockchain smartphone developer Sirin Labs and serves as chairman of blockchain network LeadCoin.

Hogeg allegedly used investor money to buy real estate and a soccer team

Among multiple accusations, the plaintiff also argued that Hogeg misappropriated investor money to make a number of expensive purchases. According to the lawsuit, those purchases included $19 million to buy land in Tel Aviv, $7 million for acquisition of Beitar Jerusalem, which is one of Israel’s top soccer clubs, as well as a $1.9 million donation to Tel Aviv University.

According to The Block, Snyder has put forward his claim himself and is not represented by legal counsel in this case.

Previous legal issues regarding misappropriated funds 

In January 2019, a Chinese investor sued Hogeg and Stox for $4.6 million, alleging that the defendants misappropriated millions of dollars worth of crypto that had been invested in the firm. According to the lawsuit, only $5 million out of its $33 million initial coin offering (ICO) held in August 2017 were actually used to develop Stox’s product.

STX hit its all-time high of $2.60 with a market capitalization of around $4.2 million during the ICO in August 2017. Since then, the cryptocurrency has gradually fallen in waves to see a market cap of around $540,000 to date. At press time, STX is down 6.5% to trade at $0.01, according to Coin360.

STX all-time price chart

STX all-time price chart. Source: Coin360

Source Cointelegraph

George Bush’s Brother Got $300K for Meeting With OneCoin’s ‘Cryptoqueen’

Neil Bush is alleged to have received $300,000 to attend a meeting involving OneCoin co-founder and current fugitive Ruja Ignatova, known as the “Cryptoqueen.”

As Law360 reported on Nov. 15, testimony in a U.S. District Court for the Southern District of New York contained allegations against Neil Bush, brother of former President George W. Bush and son of the late President George H.W. Bush.

Sibling entanglements

As Cointelegraph has reported, OneCoin is among the crypto industry’s most infamous alleged exit scams. Founded in 2014, the Bulgaria-based firm remains fully operational to date despite investigators’ allegations that it raised 4 billion euro ($4.4 billion) in a Ponzi scheme.

“Cryptoqueen” Ignatova is the sister of OneCoin co-founder Konstantin Ignatov, who signed a guilty plea in connection with the alleged fraud on Oct. 4 and now faces up to 90 years in jail.

Ignatova has been indicted on charges of money laundering and fraud but remains on the run. 

The Bush connection 

As Law360 reports, former Lock Lorde LLP attorney Mark Scott is currently standing trial for allegedly conspiring with Ignatova and her brother on OneCoin. He maintains that he believed the scheme was legal.

Neil Bush, a businessman, had been interviewed by the FBI due to his role as a board member of Hoifu Energy, which is owned by wealthy Chinese businessman Dr. Hui Chi Ming. 

One of Dr. Ming’s companies is alleged to have pursued a $60 million loan to buy an African oil field and Scott’s counsel has subsequently argued that Bush’s indirect involvement with the deal contributed to Scott’s feeling confident enough to transact with those behind it.

The oil field deal was to be financed in cash and “a very large portion of the purchase price” in OneCoin. Details of the FBI’s interview with Bush were heard at the trial, with Garvin stating:

“Bush recalled that the head of Hoifu Energy, Dr. Hui Chi Ming, received a bunch of cryptocurrency for an oil deal in Madagascar. Bush had a residual interest in the cryptocurrency from the oil deal. Bush met the woman from the cryptocurrency company, Ruja Ignatova, in Hong Kong with Dr. Hui.”

At the trial, Judge Ramos is reported to have asked Scott’s counsel David Garvin:

“So, there was an actual meeting with Ms. Ignatova, Mr. Bush and Mr. Hui?”

Garvin affirmed the meeting, noting that Bush was paid $300,000 for his participation. 

The FBI’s report allegedly noted that Hui had pledged Bush 10% of the sale if Hui was able to sell the cryptocurrency — yet the deal ultimately fell apart.

The judge quashed calls for Bush himself to testify before the court, heeding the argument made by Bush’s counsel that it would not be relevant, given that Bush was not on the board of the specific Hui company involved in the sale. The judge further concurred that Bush’s testimony would not add anything further to what was already included in the FBI’s report. 

Ignatova remains at large

As reported, Ignatov testified on Nov. 6 that after his sister fled, the security personnel who accompanied her told him that she had met with Russian speakers. This has led investigative journalists to subsequently allege that she has the support and protection of an unnamed “rich and powerful” Russian person.

Source Cointelegraph

OneCoin Co-Founder Pleads Guilty, Faces up to 90 Years in Jail

Konstantin Ignatov, co-founder of alleged crypto scam OneCoin, has pleaded guilty to participation in the multi-billion dollar fraud. According to a BBC report on Nov. 14, Ignatov signed a plea on Oct. 4 and now faces up to 90 years in prison. The news was made public on Nov. 12, the BBC says.

After being arrested at Los Angeles International Airport in March 2019, Ignatov pleaded guilty to several charges, including money laundering and fraud. While facing up to 90 years behind bars, he has yet to be sentenced and will reportedly not face further criminal charges for his role in OneCoin, except potential tax violations.

OneCoin raised $4.4 billion in Ponzi scheme

As previously reported, OneCoin is known as a major crypto exit scam alongside famous crypto scam BitConnect.

Founded in 2014, the Bulgaria-based firm remains fully operational to date despite investigators’ allegations that it raised 4 billion euro ($4.4 billion) in a Ponzi scheme, according to the BBC.

Ignatov speaks against his sister and OneCoin co-founder Ruja Ignatova

Additionally, Ignatov has reportedly provided more details against his sister and OneCoin co-founder Ruja Ignatova, also known as “cryptoqueen.” While testifying in the trial against Mark Scott, who allegedly helped launder nearly $400 million via OneCoin, Ignatov told the court that his sister obtained a passport and tickets to Austria and Greece from her home in Bulgaria.

Ignatov said that Ignatova regarded OneCoin’s critics as “haters,” and was afraid that somebody close to her was going to give her up to the FBI. Ignatov also said that he had hired a private investigator to find Ignatova, adding that he had not spoken to her since she disappeared.

Finding Ignatova

As reported by Cointelegraph, Ignatov testified on Nov. 6 that after his sister fled, security personnel who accompanied her told him that she had met with Russian speakers. Matthew Russell Lee, founder of investigative journalism-oriented publication Inner City Press, said that Ignatov’s sister informed him that she had the support and protection of an unnamed “rich and powerful” Russian citizen.

Source Cointelegraph

Dutch Court Orders Facebook to Remove Fake Bitcoin Ads

A Dutch court has ruled that Facebook must remove Bitcoin (BTC)-related fraudulent investment ads following local billionaire and television producer John de Mol’s lawsuit against the company, Reuters reported on Nov. 11.

De Mol initiated judicial proceedings against the social media giant in June 2019, claiming that Facebook failed to respond to multiple requests to remove ads of a scam that misused his and other celebrities’ images and eventually resulted in the loss of 1.7 million euros ($1.8 million) by investors.

The ruling, fine and Facebook’s stance

Following de Mol’s claim, a Dutch court ruled that Facebook must pull the ads and provide all available information about the individuals who stood behind the scam ads. Otherwise, the social media giant could be fined up to 1.1 million euros ($1.2 million). The court said:

“Facebook’s arguments that it is just a neutral funnel for information, and therefore cannot be obligated to act, is not acceptable. The company plays too active a role with respect to advertisements, which form its primary business model, to argue that.”

In the court, Facebook ostensibly stated that it had already removed the ads and was considering “all legal actions including an appeal.” Facebook said:

“Importantly, this ruling does not change our commitment to fighting these types of ads. We cannot stress enough that these types of ads have absolutely no place on Facebook, and we remove them when we find them.”

Not the first time

This was not the first time De Mol had brought up Facebook crypto ads that capitalized on his image. He first encountered the problem in October 2018. At the time, Jacqueline Schaap, a lawyer from De Mol’s legal team, told Cointelegraph via email:

“John de Mol noticed the ads for the first time in October 2018, we do not know whether these were the first adds to appear. We just have not noticed them before, but that does not mean that they have not been published.”

Facebook has also been sued in April 2018 by Martin Lewis, a British journalist and TV presenter. Lewis accused the company of defamation related to deceptive cryptocurrency ads. 

The social media platform banned cryptocurrency-related ads in early 2018. However, the company reversed its stance a few months later by updating its policies to once again allow cryptocurrency ads on the platform, a year before releasing its Libra whitepaper.

Source Cointelegraph

Oct. 28-Nov. 3 in Review

Brazil has seen another tumultuous week in the cryptocurrency industry, as the alleged pyramid scheme Atlas Quantum upsets it customers yet again, another six individuals linked to the Unick Forest crypto scheme are arrested, and the founder of A2 Trader challenges Brazilian regulators to shut down his trading website.

Here is the past week of cryptocurrency and blockchain news in review, as originally reported by Cointelegraph Brasil.

Atlas Quantum upsets customers, as it buys BTC for $5,500 and resells for $11,710 

The alleged pyramid scheme, Atlas Quantum, a Brazilian platform that claims to conduct Bitcoin (BTC) arbitration, has angered its customers yet again. This time clients are upset over the price difference in the ‘withdrawal in reals’ operation, suggested by the company’s CEO, Rodrigo Marques, to solve the company’s problem of withdrawals.

The operation gained some popularity as several users sought to sell their BTC in order to save at least a part of their investment. However, the price difference has not pleased investors given that Marques had ensured that Atlas would not “gain anything from the system.”

Apparently, the company sold Bitcoin from disgruntled users at a massively discounted price of $5,500 but resold the same coins for $11,710, more than 50% of the value offered to the company’s blocked customers. A client from Atlas Quantum came forward, saying “it is a pure scam.”

Another six individuals arrested in case of alleged crypto scheme Unick Forex 

On Oct. 26, Cointelegraph Brasil reported that a federal court ordered the detention of another six individuals suspected of participating in the activities of Unick Forex, a company that is accused of several crimes, including money laundering, and being a cryptocurrency investment scheme. When arrested, these individuals will be joining nine other arrestees, including the president of the company Leidimar Lopes. The guarantor of Unick’s investments, Fernando Marques Lusvarghi, is still at large.

Founder of A2 Trader challenges the CVM: “If I have to close the site I open another one.”

In September, Cointelegraph Brasil reported that the Brazilian Securities Commission (CVM) started investigating the allegedly fraudulent activities of A2 Trader and its founder, Kleyton Alves Pinto. A2 Trader was accused of being a financial pyramid, driving Alves to recently claim that the CVM analysis is based on fake news.

Alves further stated that no government can touch the money of investors and that the sites that report complaints about A2 Trader do so because they are “paid for it.” He added that if the CVM would proceed to shut down his trading website, he would just open another one, on servers abroad.

Genbit user goes to court to block the company’s bank accounts

The Sao Paulo Court of Justice granted an urgent injunction to a client of crypto exchange GenBit to block the company’s bank accounts. The client claims that it initiated the process because it was unable to recover his funds.

The lawsuit stated that the exchange is now suspended by the CVM as it is not authorized to offer investments. 

Alleged pyramid scheme Midas Trend sponsors French soccer match 

Even though its activities have been investigated by the Brazilian regulators, Midas Trend, which offers investment packages through Bitcoin and cryptocurrency operations, sponsored a French Premier League game at the end of October.

The alleged Bitcoin pyramid scheme sponsored the match between Lille Olympique Sporting Club Métropole and Football Club des Girondins de Bordeaux. In addition to billboard advertisements at the stadium, Midas Trend also had its logo worn on the shirts of the Lille soccer players. Midas Trend president Deivanir Santos said:

“This is our first kick-off, our idea is to break even borders and overcome all challenges. I am very happy with that.”

Meanwhile, Midas Trend customers have been complaining about the company on social networks, stating that the investment platform is inaccessible and that it is not possible to talk to the company.

Source Cointelegraph

‘Bitcoin of the Middle East’ Scam Lands Canadian Expat in Dubai Jail

A Dubai-based Canadian expat has been arrested for peddling an allegedly fraudulent “Sharia-compliant” cryptocurrency and a host of other get-rich-quick schemes.

As Gulf News reported on Oct. 30, Aziz “Com” Mirza had cultivated for himself a reputation as an entrepreneur, mentor and Instagram influencer. 

He now sits in Al Awir jail after a complaint was filed with the Dubai Police by a UAE resident allegedly defrauded of $150,000 in one of Com’s schemes.

The “Bitcoin of the Middle East”

Com targeted a global audience, including retail investors from the United States, United Kingdom, Canada and Greece. In just one of his schemes — dubbed the Leverage Programme (LP) and promising investors guaranteed “financial freedom” within a year — Com is thought to have raised £4 million ($5.18 million).

His “Habibi coin” cryptocurrency, now worthless, was billed as the “Bitcoin of the Middle East”.

Most of the funds from investors around the globe were wired to the bank account of a Dubai-based company owned by one of Com Mirza’s brothers, with huge amounts allegedly used to pay for personal expenses.

Com and another of his brothers, Rafaqat “Rocky” Mirza, used U.K.-based online platform Muslim Entrepreneur Network (MEN) to promote their schemes, spanning cryptocurrency, real estate and education.

One of the schemes encouraged MEN users to invest a minimum of £5,000 ($6,480)— at least 1,500 are cited as having signed up to the alleged scam. 

“Com’s Instagram posts are now all about food and gym”

Gulf News cites the examples of several Habibi coin investors, each of whom has lost investments ranging from $1,500 to £14,000 ($18,150). Greece-based Ippokratis Boboras told Gulf news she had invested $10,000 in Habibi Coin back in 2018:

“I was familiar with Com Mirza through the internet marketing community where he was considered an authority. I had personal chats with him via Facebook and I sent money to his personal Paypal account,”

U.K. resident Mohammad Shareef reportedly lost £2000 ($2,590) in the Habibi scheme, underscoring that he had held off from investing until he met Com at his office in Dubai in person: 

“We spoke for an hour. It wasn’t until this year that things started going down. Com’s Instagram posts are now all about food and gym. It’s been a sad experience for us. Until today there’s been no official word about what has happened with Habibi Coin.” 

This summer, Cointelegraph reported on a wave of fraudulent Libra and Bitcoin accounts surfacing online —  including on Facebook itself and wholly-owned app Instagram.

Source Cointelegraph