Directors of Alleged Crypto Pyramid Scheme Dunamiscoins Stand Trial

Two directors of Dunamiscoins, an alleged cryptocurrency pyramid scheme in Uganda, appeared before court on Monday to face 65 counts tied to obtaining money by false pretense.

Local news site The Observer reported on Jan. 8 that state prosecutors had logged over 4,000 complaints against Dunamiscoins Resources Ltd., a suspected fraud that ran its course between Feb. 2018 and Dec. 2019, before summarily collapsing. Inquiries are reportedly still ongoing.

The scheme is thought to have defrauded dozens of victims of up to around $37,600 by promising them extraordinary returns on their investments. 

Earlier reports dating to the time of the scheme’s collapse had claimed that as many as 10,000 people had been drawn in, resulting in $2.7 million in ill-gotten funds.

Suspects plead not guilty

According to the Observer, Samson Lwanga, 37, and Mary Nabunya, 53, both directors of the now-defunct Dunamiscoins Resources Ltd., pleaded not guilty to the charges. 

Lead complainant Haruna Asiimwe told reporters that he had been conned into investing money on the promise of a 30% interest earning within 21 days. Asiimwe, as others, was left empty-pocketed when the firm abruptly shuttered in early December of last year.

A statement issued in 2019 by the Uganda Police revealed that Dunamiscoins’ directors had claimed they were willing to refund investors but were unable to as their primary accounts at local banks had been frozen by the Financial Intelligence Authority.

Having been in police custody since their arrest on Dec. 10, both directors have now been remanded in Luzira prison until Jan. 22, when their case will come up for mention once more. 

Employees and investors left in the lurch

Cointelegraph reported on Dunamiscoins’ abrupt closure of its offices in Masaka in Dec. 2019, just one month after their opening. Local interviewees and witness claimed that the firm had not only defrauded investors but fleeced its employees of money paid for registration to the scheme as well.

Following his arrest, Lwanga had revealed that  most of the investors had deposited sums that ranging between $270 to $2,710.

In spring 2019, the deputy governor of the Bank of Uganda, Dr. Louis Kaskende, warned the public of the limited protections offered to them when they invest in unregulated cryptocurrencies.