Crypto investors lose $130 million in Bitcoin Kuwait scam

Investors have been left stunned after losing about $130 million in a ‘Bitcoin Kuwait’ crypto investment scam that collapsed within hours. According to reports, the financial scam is one of the largest in the country’s history since digital trading started.  

According to reports, the memecoin based on Solana was promoted across several platforms. More than 2,900 investors were said to have bought into the token at different prices.

CoinMarketCap data shows that the token launched on January 14, listing at an initial price of $0.01293, before seeing a slight rise to $0.0193 on January 16. Presently, the token is trading at $0.0006074, dropping by 99% since it launched.

The much-anticipated ‘Bitcoin Kuwait’ reportedly collapsed hours after it launched, leading to investors losing a cumulative of 40 million Kuwaiti dinars ($130 million).

The token was created by an anonymous developer over three years ago, promising investors returns. However, the scheme was exposed by Dr Safaa Zaman, a professor of Computer Science at the Kuwait University. Dr Zaman is also the president of the Kuwait Society for Information Security.

Crypto investors lose heavily in Bitcoin Kuwait scam 

According to Dr Zaman, the creators of the token had vanished, stealing invested funds. She mentioned that most of the affected population were young and inexperienced traders, one of the target audiences in these kinds of investment scams. They entice these inexperienced traders with mouth-watering returns on their investments, urging them to bring in others for referral bonuses.

She mentioned that there is no regulatory framework to prevent the crime, asking what the country was doing when such a crime of that scale was unfolding. “Where is the oversight, where is the legislation, and where is the fraudster?” she asked.

While there has been little movement on the part of the Ministry of Commerce and Industry to license Bitcoin trading in Kuwait, a framework has been put in place to shield the public from these sorts of cryptocurrency scams.

Dr Zaman added that the Central Bank of Kuwait still prohibits dealings in digital assets, but efforts to enforce these laws are still weak. Criminals take advantage of these loopholes to carry out their crimes. She also mentioned that there are people who lack the needed financial literacy and would jump at any opportunity to make money through these investments. She added that a recent study showed that only gamblers and young people dabble in crypto in the country, making them susceptible to manipulation.

Dr Zaman wants legislation on cryptocurrency 

Dr Zaman has called on the government to issue legislation on digital assets. She mentioned that if they fail to implement legal sanctions, fraudulent schemes like the Bitcoin Kuwait scam will continue to thrive. She also urged authorities to go after and prosecute everyone involved in the Bitcoin Kuwait scam, highlighting that they can start from the intermediaries that promoted the token to the general public.

She also discussed the role of media outlets and newspapers in promoting and fueling the enthusiasm for these assets. She criticized these outlets for encouraging inexperienced people to enter the crypto industry without the needed knowledge. Dr Zaman noted that the coverage and advertisements are part of the reasons why the industry has been overtaken by criminals who carry out financial scams. “The mastermind behind ‘Bitcoin Kuwait’ operated freely for three years, deceiving investors and disappearing with millions,” she added.

She talked about past financial issues involving digital assets, citing an example of a Chinese firm that traded Bitcoin. She mentioned that the bank eventually suffered catastrophic losses that led to its bankruptcy. Meanwhile, the ‘Bitcoin Kuwait’ case is not an isolated event as cybercriminals now use different methods to carry out their scams in the industry. They lure their victims with several sweet offers, even going as far as using fake or doctored images and statements.

Dr Zaman also mentioned the case of an engineer who lost about 300,000 Kuwaiti dinars (approximately $975,000) to these fraudulent digital trading schemes. She mentioned that the loss left him broke, with the engineer resorting to selling most of his assets. While he had the chance to sell his assets, others may have used their entire funds for the investment, pushing them to other vices and even self-harm. She added that experimenting with assets without proper knowledge could lead to financial losses.

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