A couple of months ago, reports emerged that dozens of people had been swindled of undisclosed amounts in a Crytpocurrency scam.
They had been urged to invest by Coin Chambers operatives with the promise of reaping ’easy’ returns. The more you invest, the more you get, they were told, some even went to the banks to secure loans for the venture.
The scammers had a Facebook page which has since been taken down and links to a website coinchambers.com which is also no longer available, which they used to lure customers in.
Then suddenly, the money Malawians invested vanished, the issue was reported to police who began to investigate.
On Thursday, fiscal police announced that they had arrested two young men Chipo Upindi Hunga, 29 and Manford Mkandawire, 28 on suspicion that they defrauded several people of money totaling more than K130 million though a Cryptocurrency company called Coin Chambers.
But the principal suspect Dorothy Kalichero who opened Coin Chambers alongside the two is still on the run.
Hunga and Mkandawire have been charged with operating a financial institution without being registered or licenced by the Registrar of Financial Institutions, conspiracy to defraud, fraud and money laundering.
Clearly, the Reserve Bank of Malawi caught wind of the alleged fraud, but they could not do anything about it because Cryptocurrency defies the authority of Central Banks. In May this year, the RBM warned Malawians against investing blindly in Cryptocurrency.
In a public statement, RBM said Cryptocurrencies, though used as a means of payment or medium of exchange, store of values or invested assets online, are not legal tender in Malawi.
“The public should be aware that any and all activities related to buying, trading or usage of cryptocurrencies are performed at owner’s risk.
“Cryptocurrencies are not legal tender in Malawi and should not be used to for discharge of any obligations that suggest that they are a perfect substitute for the kwacha,” says RBM governor Dalitso Kabambe.
Reacting to the Coin Chambers issue, in a Facebook interview conducted in May, founder and CEO of BitCoin Malawi Grey Jabesi said: “If you ask me, this is more of an education problem than a Cryptocurrency problem. We just need Malawians to get educated about the subject and become wise enough to not invest in scams thinking it’s Cryptocurrency.
“We are the only one doing the real thing. The others are doing scams, they promise riches and gains. You can look at our customer reviews.”
Jabesi has videos on Youtube, podcasts posted online in which he tries to educate people about Bitcoin and Blockchain technology.
Cryptocurrency is a Blockchain Technology which has proven beneficial in various areas of commercial activity, but some studies have criticised its get-rich quickly proposition and the lack of readily available information before one can think of investing in it.
President of the ICT Association of Malawi (ICTAM) Bram Fudzulani says being a decentralised way of trading, the RBM indeed has no control over Cryptocurrency.
“But the beauty about it, is that no one regulates the money, the transactions are decentralised, you’re able to follow the money, you can actually know where the money has been moved to.
“The problem here in Malawi is that there is no user awareness and some people are using that ignorance to defraud others,” observed Fudzulani.