According to the National Consumer Commission, about 4,000 South Africans who invested in a bitcoin mining equipment supplier, Obelisk, may have participated in a pyramid scheme. The commission said participants in the pyramid scheme may have lost as much as over $6 million.
Obelisk Used Social Media Platforms to Lure Victims
A South African consumer watchdog, the National Consumer Commission (NCC) recently announced that Obelisk — a purported bitcoin mining equipment supplier — is in fact a pyramid scheme that has swindled millions of dollars from unsuspecting investors. The watchdog reportedly made the announcement after it received complaints from investors who accuse Obelisk of defrauding them.
According to a Businesstech report, the 4,000 individuals who participated in the investment scheme were convinced they were purchasing bitcoin mining equipment that could generate constant income for them. The machines cost between $18.75 and $24,850, the report added.
In a statement, the commission revealed Obelisk had lured victims via social media platforms like Facebook:
Participants were recruited on social media platforms, such as Facebook, where they were required to make a minimal investment. Upon joining and making an initial investment, they were added to different Obelisk Whatsapp groups.
The watchdog added some investors had been given small returns in order to convince them to invest more.
Residents Warned Against Falling for Scammers’ Tricks
However, problems soon started when investors could not make withdrawals. The report alleges that individuals who confronted the operators of the scheme were blocked and subsequently removed from the Whatsapp groups.
The NCC has reportedly confirmed receiving 25 complaints from investors who claim to have lost $41,400. The watchdog, however, believes that as many as “4,000 participants from eight Whatsapp groups” might have lost an equivalent of $6.18 million.
According to Thezi Mabuza, the NCC’s acting commissioner, South African residents must avoid being tricked by investment schemes that promise significant returns in a very short space of time.
“We implore members of the public to spare themselves from heartache and suffering by not joining these deceptive schemes. History is replete with many examples of these schemes that inevitably collapsed, often leaving a trail of financial distress, broken trust, friendships, and even broken families,” Mabuza said.
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