IS BIT­COIN MIN­ING THE NEW FOREX

CityPress - - TENDERS -

Just as un­scrupu­lous busi­nesses have preyed on the ig­no­rance of the pub­lic around forex trad­ing, au­thor­i­ties are be­com­ing con­cerned about the in­crease in bit­coin and cryp­tocur­rency busi­ness of­fer­ings that could be fronts for scams.

A joint warn­ing was is­sued by the SA Re­serve Bank, the Fi­nan­cial Ser­vices Board, the SA Revenue Service and the Fi­nan­cial In­tel­li­gence Cen­tre about the risks associated with the use of vir­tual cur­ren­cies for in­vest­ments.

“While there are ben­e­fits associated with this new tech­nol­ogy, it is dif­fi­cult to as­sess those ben­e­fits against the risks of some­thing so novel, in­no­va­tive and tech­no­log­i­cally so­phis­ti­cated,” they warned.

“Users of vir­tual cur­ren­cies can there­fore be­come sus­cep­ti­ble to fraud­u­lent or any other crim­i­nal be­hav­iour as they may be less cir­cum­spect than usual when faced with the prom­ise of high-re­turn in­vest­ment op­por­tu­ni­ties.”

Bit­coin­zar.co.za, an in­for­ma­tion web­site for bit­coin in­vestors, warns that there is a trend grow­ing in South Africa of schemes us­ing bit­coin hype to make money off “un­sus­pect­ing and ig­no­rant peo­ple”.

It warns against any scheme “in the name of bit­coin, min­ing or cryp­tocur­ren­cies that as­sure any form of fixed re­turn. No fixed re­turns are pos­si­ble.

“If any com­pany is as­sur­ing fixed re­turns, we be­lieve it’s a Ponzi/mul­tilevel mar­ket­ing/network mar­ket­ing scheme, or a scam.”

Blake Cun­ing­ham con­tacted City Press af­ter his mother was ap­proached by a sales­per­son who told her about this “amaz­ing” con­cept of buy­ing a “con­tract” to mine bit­coin in their min­ing pool.

Blake is well versed on bit­coin as he has been an in­vestor in the cryp­tocur­rency sec­tor since 2014 and did his home­work be­fore in­vest­ing. His un­der­stand­ing of bit­coin sug­gests that buy­ing min­ing “con­tracts” is, at best, a highly risky ven­ture and, at worst, a front

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