Kenyans Lose Millions in Velox 10 Global Crypto Scam

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Esther Muthoni, of the investors who lost Kshs. 3.2 to Volex 10 Global, speaking to Nation Media (Pic courtesy of Nation)

A Brazilian company called Velox 10 Global, which claimed to be a firm dealing in cryptocurrencies has collapsed with millions of shillings of Kenyan investors, according to Nation, one of the most popular Kenyan Daily.

The company, which was registered on January 25th, 2018, began attracting Kenyan investors in 2017 by promising high returns to investors. The firm operated as an MLM where investors would earn extra by onboarding more investors.

The official company website www.velox10.com has gone offline and is up for sale. The other company website, veloxglobal.com, seems to have been a dummy page that never existed.

The firm was charging a membership fee of Kshs. 10, 000 ($100) and an upgrade option of Kshs. 20, 000 ($200) to investors. It promised daily returns of Kshs. 400, 000 ($4, 000).

The company had hired a number of local marketers after its colorful launch at Hotel Intercontinental on September 20th, 2017.

According to Esther Muthoni, a businesswoman who lost Kshs. 3.2 ( $30, 200) to the scam, the local contacts are no longer accessible both via text or calls.

This is not the first time that a crypto scam has happened in Kenya. Just a few months ago, The Capital Markets Authority of Kenya (CMA Kenya) put out a cautionary statement warning Kenyans about a crypto investment called Kenicoin.

In a call with BitcoinKE, CMA noted that Kenyans need to do due diligence before investing in opportunities that offer high returns with no basis. The regulator noted that Central Bank of Kenya (CBK) has put out a statement to the public and warning Kenyan banks not to deal in cryptocurrencies which are still unregulated, and therefore a risky investment.

BitcoinKE has put out many posts that seek to educate investors on how they can identify and avoid scams to the Velox 10 Global scam.

Cryptocurrency investments are no different from other forms of financial instruments. Due diligence and caution are needed before one puts their hard-earned cash into a cryptocurrency. Investors need to be well educated on how to buy and sell cryptocurrencies and how investors can protect themselves from such scams with the promise of big and quick returns.

While cryptocurrencies are unregulated in Kenya, they have not been classified as illegal and therefore do not fall under any jurisdiction including the CBK Act. Due diligence and caution however are needed to avoid losing money in scams.

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