Sri Lankans Have Been Duped By Fake Crypto Schemes

Ponzi schemers are making Sri Lankans’ financial woes worse by draining their assets through fraudulent cryptocurrency schemes.

Crypto investor Harshana Pathirana told Al Jazeera:

“I invested 2.2 million Sri Lankan rupees [around $6,162] and was promised a five times higher return. But I only received about 200,000 Sri Lankan rupees [around $560]. I lost everything.”

The swindle was discovered as the nation was going through one of its worst economic crises ever as a result of a May debt repayment default.

Ponzi scheme “highly profitable”

Citizens are finding it more and more difficult to make ends meet as inflation soars beyond 50%. Currently, a number of Sri Lankans are claiming that a gang of people scammed millions of rupees through a false bitcoin investment scheme.

The investors assert that Zhang Kai and Sri Lankan Shamal Bandara formed Sports Chain in early 2020, which they claimed was a platform for investing in cryptocurrencies, in documents given to Sri Lankan authorities.

On its website, Sports Chain billed itself as a “highly profitable” and “anonymous” venture with the goal of “becoming a steadily rising cryptocurrency used in the digital finance of the sports industry,” Al Jazeera said.

One investor, named Ranjan, told Al Jazeera:

“We were asked to deposit money to a bank account, download a mobile application and start trading.”

“My family thinks I sold the car and deposited the money in my bank account,” said another investor.

Uncertain actual investor loss

According to someone who spoke with Al Jazeera, more than 1,000 people are claimed to have joined the plan in just one district. It is unclear how many people have been conned overall, though.

This person asserts that the plan had a snowball effect since it attracted new investors.

According to the study, the scam is said to have largely affected those between the ages of 30 and 40, particularly those from lower-middle-class rural backgrounds and professionals like doctors and security officials.

People from Sri Lanka who have worked in places like South Korea, Italy, and Japan were among the victims.

“If I had my money today, I could have opened up a fixed deposit account and used it to improve the economic status of my family,” 38-year-old Roshan Marasingha, said from South Korea. 

“Unfortunately, we were the bottom-level investors in their pyramid (scheme). So we didn’t receive the return that was promised,” Marasingha added.

Central bank voiced new crypto fears

The Department of Government Information of Sri Lanka announced a new proposal last year that would see a nationalized, “integrated system of digital banking, blockchain, and cryptocurrency mining technologies” being developed.

However, domestic watchdogs in the South Asian nation this month warned its citizens against using bitcoin, alleging that it is “mostly uncontrolled,” in the midst of continuous political upheaval in the region.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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