How Kenyans Were Conned Ksh1 Billion

Undated image of Capital Markets Authority chief executive Wycliffe Shamiah
  • Kenyans lost Ksh1 billion to Ponzi schemes, according to the Capital Markets Authority chief executive Wycliffe Shamiah.

    The CMA CEO told Parliament that Kenyans lost the money through cryptocurrency, online forex frauds, ordered refunds, illegally pooled funds, real estate and Ponzi schemes.

    Shamiah stated that many Kenyans are enticed by foreign companies which ask them to send money to offshore accounts for buying and selling currencies, shares, commodities and metals like gold online.

    Undated image of Capital Markets Authority chief executive Wycliffe Shamiah
    Capital Group

    “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 was quoted by the publication.

    In May 2021, a section of Kenyans who had invested their money in an online App known as Amazon Web Worker were left counting losses after the App was deleted from the Google Play store without any official communication.

    At the time the App went down hundreds of Kenyans who had set up accounts and even referred their families and friends to join with the promise of making money online, had varying amounts in the system which they could not access.

    CBK warned Kenyans after establishing that fraudsters were continuously coming up with new tactics to swindle unsuspecting Kenyans feeding on the vulnerability of most Kenyans struggling to make ends meet during these unprecedented times. 

    The Central Bank of Kenya (CBK) published a detailed document highlighting the most common scam jobs in the country, including steps Kenyans, should take to steer clear of fraudsters.

    These are some of the warning signs CBK asked Kenyans to be on the lookout for:

    1. Being promised a high return at no risk whatsoever if you invest in a particular scheme.

    2. Being asked to invest in an institution or scheme which is neither regulated by nor registered with, a regulatory body.

    3. A promise of higher returns the more people you recruit into your investment scheme.

    4. An investment scheme with extraordinarily high returns.

    5. The pressure to make an investment decision because the opportunity will close, or because the first investors made much higher returns than later investors.

    6. Being asked to invest in a scheme whose details of the owners are murky, or unclear.

    7. A guarantee of high returns, regardless of circumstances.

    8. Being bombarded with testimonials, especially from people who have made a lot of money, or who constantly seem to be on holiday, or surrounded by expensive cars and houses.

    Central Bank of Kenya (CBK) building in Nairobi.
    Central Bank of Kenya (CBK) building in Nairobi.
    Simon Kiragu