Cryptocurrency ‘Scam’ Has South African Police Chasing Billions

A unit of the South African Police Service said it’s started an investigation into an alleged cryptocurrency investment fraud that has affected more than 28,000 people and led to losses of more than 1 billion rand ($80.4 million).

The allegations involve “BitCaw Trading Company, commonly known as BTC Global,” the police unit said in an emailed statement on Friday. “Members of the public are believed to have been targeted as part of the scam and encouraged by BTC Global agents to invest with promises of 2 percent interest per day, 14 percent per week and ultimately 50 percent per month.”

“BitCaw Trading was not involved in the BTC Global scam and we are shocked to see our name connected with it,” Andrew Caw, who set up BitCaw Trading, said in messages via Facebook on Friday. “BitCaw Trading assists people with buying & selling Bitcoin as well as other Bitcoin related services. We do not manage third-party money or offer any kind of investment” and BitCaw didn’t set up BTC Global, he said.

BTC Global’s services are suspended, according to that company’s website. In a statement on the site it blames its financial woes on a former employee. No contact details are given for BTC Global.

“We are as shocked and angry as everyone,” the BTC Global team said in the statement. “If you feel you’ve had a crime committed against you, you need to follow the legal procedures to deal with the matter.”

Read here about how South Africa’s central bank views digital currencies

Bitcoin prices have declined 45 percent this year and 58 percent since the high of $19,511 reached on Dec. 18. It was 0.9 percent lower at $7,485 as of 9:14 a.m. in New York.