IS BITCOIN MINING THE NEW FOREX
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