Connect with us


BEWARE: All Bitcoin HYIPs and MLM Schemes are Scams!



Bitcoin HYIPs

Bitcoin is the oldest and most popular cryptocurrency in the world. However, as bitcoin adoption is on the rise so is the number of bitcoin scams. Unfortunately, many of these scams have infiltrated Africa in the past few years and are preying on unknowing users who want to make money online using bitcoin.

In this article, you will find out why all so-called bitcoin high yield investment plans (HYIPs) and MLM schemes that involve bitcoin are outright scams and how to identify these schemes so that you do not fall victim to them.

What Are Bitcoin HYIPs and Why Are They Scams?

HYIPs (high yield investment plans) promise their “investors” very high returns on their invested bitcoin. The claimed returns (which are sometimes “guaranteed”) can range from 1 percent per day up to 100 percent per month, or more.

HYIP operators usually claim that they invest their “investors” bitcoins in a sophisticated way to generate high returns. Of course, that is a complete lie. Instead, they only pay out when new money trickles in through the registration of new “investors”, which is exactly why all HYIPs have well-paying referral programs that are there to lure new members to the scheme and to keep existing members propagating it.

In other words, all bitcoin HYIPs are simple and straightforward Ponzi schemes where existing investors are paid with the money coming in from new investors until the scheme collapses and the operators disappear with the funds. Due to bitcoin’s pseudo-anonymity, disappearing with stolen funds is easier than ever. Hence, the sudden growth in this type of scam.

No Protection for ICO InvestorsLegitimate cryptocurrency investment platforms, such as Iconomi, have annual management fees and transparently show their users what they are investing in and how their funds are performing. Also, users can pull out their invested funds at any time.

HYIPs, on the other hand, are always very secretive about their “investment” activities and it is hard to get your money out once you are in the scheme. Why? Because they are simply scams aimed at stealing their investors’ money once the pot has gotten big enough for the operators to exit.

What are Bitcoin MLM Schemes and why are they scams?

Bitcoin MLM (multi-level marketing) schemes take the popular element of network marketing (also known as direct selling) and leverage the popularity of bitcoin to create a scam.

It is very easy to identify a bitcoin MLM scam as they all have one thing in common. They do not sell a product or a service. Big companies that use multi-level marketing such as Herbalife, for example, have products that their direct sales people sell. When it comes to bitcoin MLM schemes there is no product and no service, which is why they can be so easily identified as just another pyramid scheme.

bitcoin scamMembers of bitcoin MLM schemes only really earn by recruiting new members, which is why you can find so many individuals posting referral links in Facebook groups promoting their “investment plan”, bitcoin doublers, (fake) cloud mining sites or MLM scheme.

The funds paid to their users are a small share of the new money from other participants. Those who join have to pay a fee. Then, the organisation pumps the amount into paying referrals. In the end, when the operators have earned enough the scheme collapses and they disappear with the money.

Alleged Bitcoin Scams in Africa


The recently reincarnated MMM is an alleged Ponzi scheme that has been around for decades. Its founder, Sergei Mavrodi, who ran MMM since the late 80s was found guilty by Russian courts in 2007 of defrauding 10 000 investors out of over $4 million in total and was sentenced to 4.5 years in prison. Unfortunately, after his release, Mavrodi relaunched MMM and targeted new markets, including Africa, for his scheme.

MMM came to South Africa in 2015 and has since spread to Nigeria, Ghana, Kenya, and Zimbabwe. The organisation promises a 30 per cent return on investments but gives no indication of how the business actually intends to generate these returns other than “individuals helping each other”. This should ring alarm bells as it clearly means that MMM is a pyramid scheme. Well, that and the fact that the company’s owner has already been convicted for running a Ponzi scheme with the same name back in Russia. Many governments were quick enough to caution their citizens about the scheme, yet MMM is still up and running in countries like Kenya and Nigeria and preying on unknowing bitcoin newbies who want to invest their coins.

According to reports by MoneyWeb, MMM South Africa collapsed in 2016 and its operators have disappeared with their victims’ funds. MMM announced on its South African Facebook page that the RB “was an experiment, and, unfortunately, it failed”. Victims who were involved in the scam, lost all their invested bitcoin as their accounts online were frozen as is traditionally the case when scammers collapse their schemes.


Onecoin is an alleged pyramid scheme that is claiming to have its own blockchain and cryptocurrency. However, no proof that its blockchain exists has ever been presented, whereas every other blockchain has a blockchain explorer where transactions can be viewed. Furthermore, its “digital currency” is not listed on CoinMarketCap as it is widely believed not to exist at all.

bitcoin hyipsAt the moment, Onecoin is under investigation by law enforcement departments in several countries across the globe including the UK, Germany, and India, where arrests were made.. Even the central bank in Uganda has warned its citizens about OneCoin.  Nonetheless, you will still find OneCoin “investors” send out promotional material with referral links to unknowing users online in the hope to make money by perpetuating the scheme.

MMM and OneCoin are two of the most prominent alleged bitcoin scams in Africa but there are much more. Many of them promise high returns from bitcoin cloud mining but are in reality just another form of Ponzi scheme.

How To Avoid Becoming Victim to a Bitcoin Scam

1. Ensure that company details and names of the owners are listed and real!

Most bitcoin scams will not list the company address nor have a team section that clearly outlines who runs the business and who the owners are. This is a clear red flag, so it should be the first thing to look out for.

If the company is legally registered and there are owners listed, go do a quick google search and see if these details are actually real. Fraudsters will happily provide false information in the hope that their victims do not conduct thorough research.

2. If the scheme “guarantees” you returns, it’s a scam!

If you come across a website or a system that guarantees you returns, it is almost certain to be a scam. There is always a risk when it comes to investing, so returns can never be guaranteed.

3. If the returns they state that they will generate for you are very high, that’s a red flag!

Despite the sometimes fast-increasing value of digital currencies, if you come across a scheme that tells you that it will double your bitcoin within a month or pay you 10 percent return per day, for example, you will have come across a scam with pretty much 100 percent certainty.

Just use common sense, how would a company be able to pay you 10 percent or even 1 percent returns per day other than by using the money from one investor and giving to the next as Ponzi schemes do? Bitcoin mining will definitely not make you 1 percent per day. That is mathematically impossible as we know how much the blockchain can pay out in rewards each day.

4. Read unbiased reviews online and reach out to users to hear about their experiences!

Another great way to check if an investment platform is legitimate is to find unbiased reviews and to reach out to users who have invested there. However, be wary of those who send you referral links or have them in their reviews as these opinions are not unbiased. Individuals who send you referral links when they give you their opinion are only looking to cash in on referral income, which is how participants in Ponzi schemes make money until the scheme collapses.

5. Check if the company is listed on!

The gentlemen who run the website provide an invaluable service to bitcoin novices who are tempted by high-returns promising investment schemes that are in reality just straightforward scams. The platform lists most known bitcoin scams and new sites are added on a regular basis.

6. The Golden Rule is: “If something sounds too good to be true, it probably is!”

Probably the easiest way to determine whether something is a scam or not is if it sounds too good to be true. If you are being guaranteed high returns that you can make passively online by “just” investing a few hundred dollars, you will almost certainly have come across a scam.

7. There are no legitimate bitcoin HYIPs or MLM schemes. They are all scams!

Finally, not falling for a bitcoin investment scheme in the form of a high yield investment plan or MLM/pyramid scheme is actually very easy because every single one that you come across online is a scam.

While there are many ways to earn bitcoin online, high yield investment plans and MLM schemes are not part of them and need to be avoided at all cost. If you invest in any of these schemes, you will very likely lose money sooner or later when their operators collapse the scheme and make an exit.

Unfortunately, African bitcoin Facebook groups are often full of individuals (usually with fake Facebook accounts) posting about “amazing” bitcoin investment opportunities that almost always include a referral link to a HYIP, MLM or a fake cloud mining scheme. So, keep your wits about yourself when looking for investment opportunities online and remember: “If it sounds too good to be true, it probably is!”


Bitcoin Remittance Startup BitPesa Launches in Ghana



BitPesa Secures Funding

Nairobi-based bitcoin remittance startup BitPesa has launched in Ghana to continue the growth of its footprint in the West African region. The platform will enable Ghanaians to make low-cost global payments using their local currency, the Cedi.

BitPesa’s services will make it easier for Ghanaians to make GHS payments that will settle in more than ten currencies, including NGN, UGX, and ZAR. This move shows the company’s dedication “to facilitating intra-Africa trade by increasing the ease and speed of doing business in Ghana”.

Launched in Nairobi, Kenya in 2013, BitPesa, is a digital payment and foreign exchange platform that utilises the Bitcoin blockchain to boost the speed of business payments while lowering the transfer cost to and from frontier markets. With its best-in-class products and customer service, BitPesa seeks to significantly reduce the cost of payments from Ghana to other markets such as Nigeria, where it already has operations. Ghana was BitPesa’s “natural choice for expansion” since it is the second largest economy in the West African region after Nigeria.

BitPesa’s CEO, Elizabeth Rossiello, said in a company press release:

“We are constantly looking for ways to promote intra-African trade, so we’re very excited about our services in Ghana.”

“Ghanaians should be allowed to make global payments using their own currency and we are excited to facilitate this. We will continue to improve service offerings, compliance, and value for our new Ghanaian customers,” she added.

BitPesa’s platform makes it possible for businesses to make payments in multiple currencies and has operations in Kenya, Nigeria, Uganda, Senegal, DRC, the UK and Europe. Following the launch, Ghanaian customers will be able to buy and sell bitcoin on the online platform with businesses being able to make payments intra-Africa to Ghanaian mobile accounts. Currently, BitPesa is connected to two mobile networks in Ghana with more services expected to come with time.

The move comes weeks after BitPesa made its acquisition of TransferZero, a leading Madrid-based digital payments company, expanding its footprint in the Caribbean and Latin America markets.

Continue Reading


Father Defends Son Against Fraud Allegations by Claiming Bitcoin Hack



Fraud Allegations by Claiming Bitcoin Hack

A South African court is handling a fraud case where a farm owner’s son is being accused of misappropriating investor funds and thereafter fleeing abroad. Speaking before the Pretorian High Court the desperate father insisted his son should not be held responsible for the loss of R1.3 billion of his investor’s money and instead blamed hackers.

Alleged Theft of Bitcoin Funds

The son, A’ri’El Willem Theron, reportedly began his alleged pyramid-like investment scheme in 2015, going by the name Love and Let’s Live (LLL).  Following a warning from the Financial Services Board stating he was not a licensed financial services provider and subsequent freezing of his accounts, investors funds were moved to Panama. However, when investors demanded refunds Theron Jr. told them the money had been used to buy bitcoin, which had then been stolen from storage by a hacker.

He even went ahead to tell them he had left the country seeking to start fresh and that he was sorry about the situation. The trading scheme was wound up last month with the company’s liquidators applying for the liquidation of Ruby Success, a farm owned by his father. Liquidators have argued R41 of the money out of which Theron Jr. managed to defraud investors was used to purchase the farm for his father, Andre Theron.

Only last week, Andre Theron unsuccessfully tried to convince the court not to liquidate his company Ruby Success Inc., which owns the R57 million farm in Mpumalanga. The court gave him a respite until April 5, 2018, where he should provide reasons why the company should not be liquidated.

Prelevance of Bitcoin Scams in South Africa

Interestingly, reports surfaced a few weeks ago of several South Africans having been conned after investing in a suspected bitcoin Ponzi scheme. Many investors had invested anywhere between R16,000 and R1.4 million worth of bitcoin with BTC Global and had received inconsistent payouts until mid-February when they stopped entirely. While the firm has denied any wrongdoing the architect behind the scheme has since gone underground and is being pursued by authorities.

For the case of Theron Jr., his father asserts that his son took precautions and stored more than double of his investors’ funds offshore to cover investments. He also said his son used the funds to buy bitcoin since after the closure of his accounts it was the only viable way to pay investors. He denied any of the proceeds of the scheme had been used to purchase the farm or he and his son were fraudsters, alleging Theron Jr. had lost R700 million of his own money in the scheme. Meanwhile, prosecutors are following up on leads gained from the father’s testimony when he let it slip his son may be hiding in Ireland and hope to apprehend him soon.

It has become common practice among bitcoin-related Ponzi schemes to claim that they were hacked when they disappear with investors’ funds, which puts Andre Theron’s statement that his son’s funds digital currency holdings were hacked and stolen into question.

Continue Reading


Cryptocurrency Market Analysis March 16, 2018 – HODL: Friend or Foe?



Cryptocurrency Market Analysis

The ‘HODL’ strategy that everyone has been talking about during the beginning of the cryptocurrency market fall, is now fading away. Regulations, rumours, and ad banning by Google and Facebook managed to crumble investors’ trust in this market. Having said that, the blockchain has gained a lot of popularity all around the world. We still believe that even after a big tumble, as this one, cryptocurrency values will come back skyrocketing again, aiming for at least one trillion in total market value by the end of this year.

Price Analysis

Bitcoin (BTC)

In our previous analysis, we were expecting for the price to move sideways and even drop again to retest the local support from $9,000. The price did move in a sideways direction and this week broke below to retest a strong support at $7,500.

Currently, the candlestick patterns emerged above the mentioned support are indicating a low bullish signal, which can get stronger if this week will close back above $9,000. Otherwise, we could see a continuation of the down move, slowly heading for the key level support from $6,000.


Ethereum (ETH)

Ether proved itself stronger at the beginning of the week, but it was also pulled into the whirlpool in which the entire market entered at the end of last year. As we expected, bulls could not breach above the latest highs, at the end of February, and currently is trading in a key support area, right above the $600 level.

For the moment bulls seem to have balanced the power and the drop could see a short break around these levels. A strong move upwards is highly unlikely in the following week, and prices could see some stability below $800.


Ripple (XRP)

The Ripple company has been very active in the media lately promoting new partnerships for their services, but the XRP continued the down move alongside the other cryptocurrencies.

Currently, the price action shows a slowdown of the drop at the key support area around $0.70. This drop just builds up a stronger accumulation area. Even though the bears’ pressure has yet to dissipate, the wheel might soon turn in the favour of the bulls.



Buroka Tech

This cryptocurrency market analysis is being presented by Buroka Tech. Buroka Tech is cryptocurrency-focused technology provider for financial institutions. 

Continue Reading

Popular Posts