How did we get here?
(illstration of depressed female: Source; Vecteezy)
7 Ponzi Schemes That Only Few Ugandans Survived!
“Joseph, how much money may you have on you?” my buddy Raymond asked me over the phone one fateful morning. “I've got a business idea”. I was in my first year at Makerere University, I was naive and desperate for money to survive. I thought this was an opportunity from God. When I considered that along with Raymond's prior investments in Super Life and his successes, I was hooked. He was ready to reveal something about Dunamiscoin, so I listened intently. The main selling point for investors was a promise of 30% returns, depending on investment, within 21 days. The funds had to be any sum greater than 100,000 UGX ($30), therefore investing 1,000,000 UGX meant receiving 1,300,000 UGX at the end of 21 working days that is 300,000 UGX in profits which of course cannot be guaranteed in any asset class.
Dunamiscoin operated branches in Masaka, Kampala, and Mbale among other districts. The victims told the then Speaker of Parliament Rebecca Kadaga that their faith in the company was driven by President Yoweri Museveni’s endorsement of the company’s activities and the unceasing media advertisements and campaigns.
(Image: Kermit frog meme)
The independent, a popular magazine in the country wrote, “Records indicate that more than 1,000 customers from around the country had deposited money ranging from one million to 800 million Shillings, upon being promised a 40 percent return on investment. At the time of its closure, the company had collected an estimated 10 billion Shillings from the public.”
At the time, Raymond had already invested one million shillings and was reaping his first profits. I had saved up two hundred thousand Ugandan shillings and planned to purchase a phone for myself. My mother told me that it is a scam with a goal it plans to hit based on her experience. She recommended Raymond to stay for another month after that since she feared they would close and vanish, but I told her I would stay for two months because I needed to see a reasonable return on my investment. And that was the mega plan we had to scam scammers.
On December 6, 2020, I cheerfully awoke and, as a young investor, I took my funds to New Taxi Park where Dunamiscoin had offices. I had huge hopes for my earnings at this time, and I imagined myself surpassing my peers. I arrived and was greeted by a lovely young woman who gave me my contract. With all my strength, I signed it. I had visions of mansions, automobiles, land titles, and a very attractive bride as I traveled the path to financial success. Unaware of their fate, a large number of individuals flocked to the location carrying bags of cash. Later that week, Raymond took his 1.7 million out of the company and began improving his place at Kabale University.
The company shut down all of its offices across the nation one week before I received my first return on investment. I learned while riding in a taxi. The alleged theft of almost $2.7 million from investors and staff was the result. 40% returns over the initial investment were guaranteed by the firm. I contacted my mother and told her what had happened since I was upset about my first professional setback.
(GIF: Fainting African American lady)
OneCoin was one of Uganda's most infamous cryptocurrency Ponzi scams in recent years. In exchange for investing in a brand-new cryptocurrency, this scam guaranteed investors substantial profits. The money that investors were putting in was only being utilized to recoup the investments made by earlier investors; the cryptocurrency itself was never truly produced. With an estimated loss of over $4 billion, OneCoin is regarded as one of the biggest Ponzi scams in history.
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PlusToken was yet another cryptocurrency Ponzi scam that ran in Uganda. By trading cryptocurrency, this scam guaranteed investors enormous profits. The plan, however, was a Ponzi scam, and the funds that investors were contributing were only being utilized to reimburse previous investors. According to estimates, PlusToken duped investors of more than $3 billion across the globe.
One Twitter user commented that "some of these schemes, like AIM Global, continue to run and people lose billions every year but there is no fight from government."
In October 2019 the Minister of Finance issued a public statement stating:
“The government of Uganda does not recognize any cryptocurrency as legal tender in Uganda.”
As such, unlike other owners of financial assets who are protected by Government regulation, holders of crypto-currencies in Uganda do not enjoy any consumer protection should they lose the value assigned to their holdings of crypto-currencies, or should organizations facilitating the use, holding, or trading of crypto-currencies fail for whatever reason to deliver the services or value they have promised”
(Image source: Cointelegraph.com)
In December 2020, the Financial Intelligence Authority (FIA) amended the Anti-Money Laundering Act to include virtual asset service providers (VASPs) as accountable persons. This was done to hold crypto service providers accountable for scams. To regulate cryptocurrency in Uganda, existing regulations like the Foreign Exchange Act 2004, Electronic Transactions Act 2011, Computer Misuse Act, and Electronic Signatures Act 2011 can be used. These acts provide a comprehensive legal framework for e-commerce, ensuring the security, facilitation, and regulation of electronic communications and online transactions. The National Payment Systems Act 2020 regulates electronic money issuance and oversight.
With the rise of technology and e-commerce, the government should adapt by regulating cryptocurrency to make it safer. This could involve issuing licenses to crypto service providers or enacting regulations to govern the area.
Wrtten by;
Mugerwa Joseph
Eh, because what is this..
This is quite a good read.
Interesting
Nice piece 👏
Quite informative