The Ugandan police arrested one of the directors of Dunamiscoins Resources Limited, a cryptocurrency startup that suddenly shut down and duped many people of more than $2 million.
On Dec. 9, Daily Monitor, a Ugandan daily news outlet, reported that Mr. Samson Lwanga, one of the directors of this cryptocurrency scheme, has been arrested and will soon face trial. The police are still searching for the other four directors of the firm.
The firm had reportedly duped more than 10,000 Ugandans of 10 billion Ugandan shillings ($2.7 million).
According to a spokesman for the Kampala Metropolitan Police, Mr. Patrick Onyango, the police have already opened a general inquiry file, and there are still carrying out investigations regarding the case.
According to him (Lwanga), they are willing to refund the money, but the problem is that the Financial Intelligence Authority froze their accounts. And they cannot access or withdraw any money. We are going to get in touch with the Financial Intelligence Authority to prove if what Lwanga is telling us is true on freezing the accounts.
Lwanga added that most of the victims made monthly deposits of between 1 million shillings and 10 million shillings.
Like many other crypto-based scams, Dunamiscoins lured many people into joining the firm by promising them significant returns, up to 40%, on cash investments within a short time.
Since the firm was reportedly working with some money transfer companies in the city, many people believed that it was genuine, joined the firm, and received the initial benefits.
This prompted them to encourage their family and friends to join the firm, and some even went to the extent of getting loans, only to find out the hard way that they had been duped when the firm closed down all its offices and made away with their money.
Notably, crypto-based schemes are not new in Uganda or Africa as a whole, given that little to no regulations exist for the emerging industry.