No country is losing as much to cryptocurrency scams as Uganda.
The suicide note cited “personal reasons.” But Ashraf Nusubuga, a radiology student at Kampala’s Makerere University — Uganda’s leading higher education institution — didn’t hang himself over a love affair gone wrong or because of academic pressure. The 22-year-old killed himself after losing money he had invested in a bogus cryptocurrency firm.
He had put all of his money — and some he had borrowed — into what turned out to be a Ponzi scheme, lured by the promise of high returns, according to Luke Oweyesigire, deputy spokesperson for Kampala Metropolitan Police. But Nusubuga isn’t the only one to have fallen victim.
A series of large cryptocurrency scams is rocking Uganda, turning the East African nation into an unlikely hub for fraudulent firms claiming to offer digital currencies, while preying on weak governance and low financial literacy. Other major cryptocurrency scams in 2019 involved developed economies — Japan’s BITPoint exchange lost $28 million, and con men in the U.K. and the Netherlands stole $27 million from Bitcoin users. Globally, cybercriminals stole $4.3 billion from users and exchanges last year. But Uganda is the worst hit — by far.
At least five cryptocurrency firms have closed shop and walked away with a total of more than $26 million of their clients’ money in the past six months. From students and churchgoers to army officers and government officials, the victims span Ugandan society. Robert Bakalikwira, a criminal investigations officer probing these cases, estimates that in all, 200,000 Ugandans have lost about $1 billion, or almost 4 percent of the country’s GDP of $28 billion, over the past two years.