According to reports from Zimbabwe, Martin Mhlanga, the mastermind behind the Cryptoshares bitcoin pyramid scheme, has vanished along with over $6 million in investor monies. Along with Mhlanga, the personnel tasked with administering Cryptoshares’ social media outlets have vanished.
According to one local newspaper, Mhlanga had effectively utilized a series of exaggerated promises to entice numerous naive investors to invest. For example, the research notes that many of the victims were enticed into investing by claims that initial Cryptoshares investors would get a $2,000 monthly membership premium. Additionally, investors were promised a payment equal to twice their initial investment.
Believing they would also be entitled to the same monthly payment, some of Mhlanga’s victims are believed to have sold their properties in order to raise the necessary funds. Others are said to have financed the original investment through bank loans.
However, when September 1 rolled around — the day investors were meant to receive their dividend — many Cryptoshares investors realized they had been duped. Indeed, as one Twitter user, Tendai Tomu, points out, the first indicators of the company’s impending demise were evident at the end of August, when Cryptoshares encountered payment issues.
While the report indicates that some Cryptoshares investors have denounced the theft to law police, many in Zimbabwe’s crypto community believe such an action would produce little. They cite previous bitcoin pyramid schemes, such as Bitcoin Interchange, that fell similarly after defrauding numerous investors.
Funds That Have Been Stolen Are Not Recoverable
Meanwhile, other Twitter users, such as Tendai Tomu, are sure that victims of this latest cryptocurrency pyramid scheme will never have their monies returned. Tomu stated the following:
Sad indeed! I don’t think the funds will be returned because remember he was paying early investors with deposits from new ones so the equation will never balance. The best people can do is to learn from this.
Others, including as lawyer Prosper Mwedzi, have advised notifying cryptocurrency exchanges about the fraud. However, others argue that such frauds will continue to occur unless more is done to educate the public about the fundamentals of investment.
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