Thousands Sri Lankans lose billions of rupees in a fake Crypto scheme

By Bandula Sirimanna     

Ponzi scammers are exacerbating the existing economic misery of thousands of Sri Lankans by swindling their savings with fake crypto currency schemes; informed sources divulged

Details of a latest Crypto currency Ponzi (Pyramid) scam have been revealed recently following a complaint filed in a civil lawsuit by a disgruntled investor Sudath Ranjan Silva at Colombo Chief Magistrate’s Court.        

More than 1000 Sri Lankans in one district alone reported losing around Rs. 8 billion in investments made in Sports Chain crypto currency platform founded by Zhang Kai, a Chinese and Shamal Bandara, according to documents submitted to Sri Lankan authorities. 

Colombo Additional Magistrate Manjula Rathnayake on Tuesday imposed a travel ban on five persons for allegedly defrauding an amount of Rs.8 billion of investors in the fake Crypto Ponzi scheme called Sports Chain.

A separate complaint was made by several disgruntled investors to the Inspector General of Police claimed that around 8000 persons countrywide including doctors engineers and teachers have joined in the Sports Chain Society Sri Lanka, an  investor of the scheme told the Business Times.

They have informed the IGP these investors have been duped by a fake crypto currency investment scheme.        

On its website, Sports Chain claimed this venture as a “highly profitable” and “anonymous” company with the goal of “becoming an ever-growing crypto currency used in the digital finance of the sports industry”.

However he noted that he has done a fact check in Internet website for tracking crypto assets, there was no “Sports Chain” crypto currency registered or trading in the market.

The Sports Chain mobile application is not available on Google Play or the App Store and has to be downloaded using a web link, he added.

To use the app, investors had to enter the transfer key of the partner who introduced the concept to them. Sports Chain called this a system of “building a partner network” and actually it was a Ponzi scheme, he explained

This company has conducted promotional campaigns several events and meetings for investors, sometimes at five-star hotels in Colombo motivating them to join the chain, he added.

The Central Bank (CB) has issued several warnings in the recent past to the public of the significant financial, operational, and legal, customer protection and security related risks posed by investments in Virtual Currencies (VC) to the users as well as to the economy.

The public has also been informed that the CB has not given any license or authorisation to any entity or company to operate schemes involving VCs, including crypto currencies, and has not authorised any Initial Coin Offerings ICOs, mining operations or Virtual Currency Exchanges.