Key Takeaways
- The viral crypto trading scam that saw over $130 million vanish within hours is the largest in the country’s digital asset trading history.
- Most of the victims are said to be young and inexperienced investors who poured millions of dollars into the so-called new asset, which collapsed shortly after it was launched.
- Kuwait University professor Dr. Safaa Zaman uncovered the fraudulent scheme that allegedly spanned at least three years.
A crypto investment fraud dubbed “Bitcoin Kuwait” has rocked the Middle East and left potential investors stunned after the digital asset went under and, with it, a whopping $130 million of investor money within just a few hours.
According to media reports, the Solana-based meme coin went viral after being promoted across several platforms and attracted at least 2,900 investors who bought it at different prices.
No Safeguards in Place
Kuwait University computer science professor Dr. Safaa Zaman, who unearthed the scam, opened Pandora’s Box via social media platform X, stating that the person behind the Kuwait Bitcoin scam had vanished with investor funds. It should be noted that while the Ministry of Commerce and Industry had yet to license Bitcoin trading, there weren’t any safeguards to ensure the public was safe from such fraudsters. Placing blame squarely on the government for failing to put in place regulatory controls, Zaman asked:
“Where is the oversight, where is the legislation, and where is the fraudster? […] the mastermind behind ‘Bitcoin Kuwait’ operated freely for three years, deceiving investors and disappearing with millions.”
Dr. Zaman recently conducted a study that revealed at least 60% of Bitcoin traders in the country were mainly young individuals who are also gambling enthusiasts. She observed that this group was particularly vulnerable to manipulation since they lacked the financial literacy to safely navigate the relatively risky cryptocurrency industry. While the Central Bank of Kuwait has officially prohibited crypto dealings, the existing enforcement measures leave much to be desired.
Public Enthusiasm
Dr. Zaman is asking the government to criminalize crypto-based transactions, claiming that unless there are legal deterrents in place, the country will continue witnessing scams similar to Bitcoin Kuwait. According to Don, newspapers and digital media had fuelled the public’s enthusiasm about digital assets, creating an environment ripe for similar financial scams.
Conclusion
The unfortunate case of Bitcoin Kuwait is among many similar scams operating worldwide. With Bitcoin dominating the headlines even as it is poised to go mainstream, digital fraudsters are becoming more sophisticated and using different dubious means, including fake websites, hacked social media accounts, and even fabricated celebrity endorsements to lure victims. Users are warned to remain vigilant to avoid becoming victims of such fraudulent schemes.
