Over 10,000 Investors Suffer Losses As Bitcoin Scheme Closes Down Without Warning

Over 10,000 investors, mainly from Harare and Chitungwiza, have suffered significant losses after a Bitcoin investment scheme abruptly closed down without warning. The scheme, allegedly run by Phineas Chakanyuka, promised investors profits of 35% every two weeks on their initial deposits of between US$100 and US$300 000, according to NewsDay. However, investigations revealed that investors could earn Bitcoins for free through Bitcoin faucets, such as playing games or completing online tasks.

Chakanyuka closed all his offices and could not be reached for comment. In a message sent to Bitcoin Interchange WhatsApp groups, Chakanyuka claimed that the system upgrade was successful and operations would resume soon. The message read in part:

Our most valued clients.

We are pleased to announce that we are still progressing very well. Our system upgrade was completed successfully. We are continuing to work tirelessly to resume operations. We had indicated that we will open on November 7 to November 14. However, there are still a few requirements that we are yet to complete on our side with our broker, the Reserve Bank of Zimbabwe and the police.

Thank you for your continued patience in our very last phase towards official opening next year. Any inconvenience caused is sincerely regretted. Bitcoin Interchange is here to stay. Please note that your funds are available and safe. Once we get the green light we will pay everyone.

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Peter Munyai, one of the investors, sold his house to invest in the scheme and now finds himself in a stressful situation. He told NewsDay:

I am stressed. I sold my house and invested and now this guy is nowhere to be found. We are organising ourselves so that we make an official police report. Other disgruntled investors have already reported him to the police.

The police spokesperson, Assistant Commissioner Paul Nyathi, stated that they have not yet received a report from the aggrieved parties. He said:

I haven’t received such a report at the moment. I will definitely give you details as soon as I get that information.

What is Bitcoin?

Bitcoin is a digital cryptocurrency invented in 2008 and released as open-source software in 2009. It is stored in digital wallets and can be sent to other people. Transactions are recorded in a public list called the blockchain. Bitcoin experts say that the reward for mining Bitcoins will continue to halve every four years until the final bitcoin is mined, which is predicted to be around the year 2140.

This means experts predict it will take approximately 120 years, until the year 2140, for all the bitcoins to be mined. Currently, new bitcoins are created through a process called mining, where powerful computers solve complex mathematical problems. As a reward for their computational efforts, miners receive newly minted bitcoins. However, the reward for mining is designed to decrease over time. This reduction in the reward is programmed into the Bitcoin protocol and occurs approximately every four years through a process known as the “halving.”

Eventually, after numerous halvings, the reward will become so small that no new bitcoins will be created. At that point, all 21 million bitcoins that can ever exist will have been mined, and the system will rely solely on transaction fees to incentivise miners to validate and secure the network. The estimated year 2140 is when experts believe this final Bitcoin will be mined, marking the completion of the Bitcoin mining process.

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