The Capital Markets Authority (CMA) in submissions to Parliament has disclosed details of several scams to which Kenyans have lost over Ksh1 billion. Among them are dubious forex, stock trading and cryptocurrency operations as well as real estate and ponzi schemes.
CMA chief executive Wyckliffe Shamiah told the National Assembly Finance Committee on Thursday, July 7 that local and international scammers were luring Kenyans to part with their hard-earned cash through purported investments in unregulated financial products promising above-average returns.
The unregulated products include at least 40 online forex traders currently under investigation, such as AutoTrade Markets, Iforex time, Interweb Global Fortune, Trends Forex Traders, Everjoy Forex Institute and Thika Forex Trading Lounge.
The regulator through its various channels has recorded over 500 complaints from Kenyans who have suffered losses after signing up for the schemes.
“The total number of individual investors that have lodged complaints with the Authority in the different unregulated products that have been investigated is approximately 500 with a sum total of over Sh1 billion,” Shamiah noted.
The CMA noted that investors were promised returns of as high as 20 per cent. One alleged scam mastermind operating from Nakuru was said to collect funds of between Sh5,000 and Sh20,000 from clients while promising them a daily return of 10 percent from the day the money is invested.
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It was also revealed that unregulated online trading platforms continue to scam Kenyans by failing to transfer proceeds to investors when they cash out after sending money to offshore accounts to buy stocks, cryptocurrencies and forex.
A notable rise in online ponzi schemes was also observed.
In recent years, many Kenyans have fallen victim to ponzi schemes disguised as legitimate digital marketing or e-commerce platforms, such as Public Likes and, more recently, Amazon Web Worker Africa.
Before shutting down the online platforms and disappearing with investors’ cash, these platforms offered different membership tiers and referral rewards, promising frequent and high returns despite offering no clear services or products.
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