This archive report was first published on 9 July 2021.
July 7, 2021, marked a significant day for the Capital Markets Authority (CMA) as it disclosed details of several scams to which Kenyans have lost over Ksh1 billion. The scams include 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 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.
Among the unregulated products under investigation are at least 40 online forex traders, including AutoTrade Markets, Iforex time, Interweb Global Fortune, Trends Forex Traders, Everjoy Forex Institute, and Thika Forex Trading Lounge.
The regulator has recorded over 500 complaints from Kenyans who have suffered losses after signing up for the schemes. Shamiah noted that 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.
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.
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, with many Kenyans falling victim to ponzi schemes disguised as legitimate digital marketing or e-commerce platforms.
