The Ugandan Ministry of Finance has once again issued a stern warning to its people about investing or buying crypto-assets, given the rapid rise of Ponzi schemes and pyramids style business investment. According to local sources, the Government is amending its Penal Code Act to tackle these scams.
David Bahati, Uganda’s State Minister of Finance, spoke to Uganda’s parliament yesterday, and asked the government to issue strong public warnings and spread awareness regarding the risks associated with Ponzi schemes and unregulated cryptocurrencies.
Mr Bahati also noted that the Expert National Task Force on the Fourth Industrial Revolution would carry on guiding and advising the concerned crowd. The group came into existence in March 2019 to record activities and analyse cryptocurrencies, AI, 3d printing, data analysis, machine learning, internet of things, robotics, nano, and biotechnology.
Under Ponzi schemes, the companies more often than not register themselves as a legit financial business, and then after some time, the facade fades, and they reveal their true colours and turn fraudulent. These Ponzi schemes promise high returns, making people fall prey to their notorious desires by initially paying early investors with the money invested by newer participants.
Diabolical Involvement of The Members of Government
Another hitch in the fight against Ponzi schemes is the sheer amount of government members who are themselves involved in these nefarious crypto schemes. Ruhakana Rugunda, son of a former Prime Minister, was found guilty in running a Ponzi related company.
Hon Mwine Mpaka, Parliament’s Wester Youth Member noted that the corruption caused by such Ponzi schemes has its roots placed in the Government, who wilfully protect these scammers and cut them slack, letting them get away with it, stating –
“The Financial Intelligence Authority submitted a list of all companies involved in this fraudulent business and the Ministry of Finance knows them, but they are quiet. I know of a bishop who is involved in this business, and he is heavily guarded.”
To counter such attempts, Mr Bahati stated that the Ministry of Justice and Constitutional affairs had been tasked to come up with new legislation which can criminalise such farcical schemes and people behind it. The existing anti-money laundering act will go through an amendment too, and virtual assets would be added to the list.
The Bank of Uganda would pair up with the Ministry of Finance to educate Ugandans about the elements of risks involved in Ponzi schemes and pyramid investments and also educate investors about means to generate income.