File Image:REUTERS/Dado Ruvic/File Photo

CAPE TOWN - Bitcoin is becoming insanely popular amongst South Africans but now seems to be getting them into financial trouble by investing in cryptocurrencies. 

Debt Rescue CEO, Neil Roets said South Africans have been driven to the brink of bankruptcy after buying into cryptocurrency.

“We interviewed our first cryptocurrency victims towards the end of last year who wanted to go under debt review because they were no longer able to adequately service their debt,” said Roets.

“Some of them had gone as far as pawning their vehicles, taking out second bonds on their homes, and borrowing money on credit cards in order to buy cryptocurrencies,” added Roets.

While certain consumers who approached Roets for debt counselling had fallen victim to hackers and scams.

However, in most cases big losses happened due to the cryptocurrency market being very unpredictable. 

“To my amazement, many of them had been the victims of scams involving cryptocurrencies which promised massive returns,” he added.

Werner Van Rooyen, Head of the Business Development and Marketing at Bitcoin Company Luno, revealed that these are the warning signs to look out for if you might be dealing with an illegal cryptocurrency scheme:

1. Promises of very high returns/interest
2. Guarantees that you "can't lose money"
3. Little verifiable information on company and owners
4.Difficulties in withdrawing your funds
5. Social signup links with high bonuses
6. Sense of urgency to "invest now"

Things to consider if you think you came across a Bitcoin Mining scam: 

1. Inability to see or verify the proof of ownership of any mining equipment
2. Inability to see or verify their public mining address and ownership
3. New website (look it up with archive.org)
4. High referral commissions
5. Guaranteed profits

- BUSINESS REPORT ONLINE