Kenyan Bitcoin Investors Lose Millions of Shillings to Brazilian Pyramid Scheme

Thousands of Kenyans are counting losses after a Brazilian pyramid scheme went missing with hundreds of millions of shillings belonging to local bitcoin investors.

The Daily Nation reports that Velox 10 Global, which launched its operations in Kenya in 2017, managed to lure Kenyans into investing their money with them by promising them high returns.

Founded by alleged Brazilian con Ricardo Rocha, the company promised a free five-day fully paid trip to Dubai to its biggest investors in Kenya.

In Dubai, the investors would get a rare opportunity of meeting “top global business gurus”.

Kenyan business lady Ms. Esther Muthoni is one of the victims of the con scheme.

She says she was lured into investing Sh3.2 million in the scheme with hopes of make huge profits.

Muthoni also introduced her friend Lucy Kamatu, who put Sh550,000 into the scheme. The two are yet to come to terms with the huge losses.

Velox, which claimed to trade in bitcoins, promised to help investors earn millions of shillings in profits.

To sign up, investors were required to pay $100 (Sh10,000) as a membership fee, and an additional $200 as upgrade fee with the promise of raking in $4,000 in daily profits.

The company launched its operations in Kenya in a colorful ceremony held at the Hotel Intercontinental, Nairobi on September 20th, 2017.

On top of return on their investments, Ms. Muthoni says they were promised lucrative bonuses for every person they introduced to the idea.

She says she didn't hesitate to invest Sh3.2 million to the idea that would "secure her future."

“I knew I would recover the money in months,” Ms. Muthoni says.

After realizing she had been swindled six months later, she reported the matter to Central Police Station.

The man she gave the money was arrested and arraigned for fraud at the Milimani law court. The case is ongoing.

Appearing in court, the man identified as Gichuki said he also lost his investment in the scheme.

"The fact that my account was used for the transactions is no reason to blame me," he told the court.

In January 2018, a group of seven Kenyans filed a case in court seeking to stop Velox from operating in the country.

The seven; Bernard Mulwa, Joshua Obebo, Nancy Kamau, George Itabari, Barnabas Mwangi, Bernard Makira, and Stanslaus Mutua told the court that they invested their money in Velox but were worried that the company was illegally operating in Kenya.

They noted that Velox had no registered local shareholders or partners as required by the law.

The group also wanted authorities ordered to take action against Velox and its founder.

“CBK and the CMA have failed in their licensing and regulatory duties by allowing Velox to continue its illegal activities within Kenya. They ought to be compelled to take legal action against the company,” they said in court documents.

Flying Squad deputy head Jackson Owino says a probe into the scheme is still ongoing.