P.M. reinforces scam warning

By Joyetter Feagaimaali’i-Luamanu ,

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Prime Minister Tuilaepa Dr. Sa'ilele Malielegaoi.

Prime Minister Tuilaepa Dr. Sa'ilele Malielegaoi.

Prime Minister Tuilaepa Dr. Sa’ilele Malielegaoi is calling on members of the public to heed the warning issued by the Central Bank of Samoa (C.B.S.).

This is in relation to the rising number of cryptocurrency promotions in Samoa. 

“I’ve had people come visit me here at my office explaining their promotion but I always refer them to the Central Bank,” he said.

“That is the role of the Central Bank if there are such issues that arise.”

Last week, C.B.S. pointed out in a public notice that cryptocurrency is a form of digital money that is designed to be secure and in many cases anonymous. 

It is a currency associated with the internet that uses cryptography - the process of converting legible information into an almost uncrackable code - to track purchases and transfers.

According to the Central Bank of Samoa, cryptocurrency remains unregulated, which makes things even more difficult.

“It has come to our attention that there are promotions such as Onecoin cryptocurrency that are currently being promoted in Samoa,” the Bank warns. 

“How it works is that people are encouraged to sign up an account and purchase a package of tokens. These tokens can then be used to invest in a cryptocurrency, as the value of the cryptocurrency goes up, so too will your proposed reward. “In essence, you invest in the cryptocurrency and are guaranteed a substantial return on the rewards in a certain period of time.” 

The C.B.S. advises that such a scheme is very risky and people who invest in it stand to lose their investment. 

“The great risk here is that once these funds are lost then there is a huge possibility that these funds will never be recovered. C.B.S. does not endorse this cryptocurrency venture due to the high risks that it poses to unsuspecting people.”

The Bank has also confirmed from multiple credible media sources that the founder and main Onecoin headquarters in Bulgaria has been raided by Bulgarian Police as part of a “centralised cryptocurrency pyramid scheme”.

“Onecoin is also banned from countries such as Germany.

“Several crypto currency promoters have contacted C.B.S. seeking endorsement for their business and product. However they were not able to satisfy the government’s requirement of providing the relevant information for due diligence purposes (where the Central bank thoroughly scrutinises a company and its products, if we do not have all the information to make an informed decision.  

 “As a result, C.B.S., on behalf of Government, has refused to endorse such ventures. C.B.S., as the Regulator for financial institutions in Samoa, does not wish to prohibit new ventures that will benefit Samoa’s public and economy; however, as with every new venture such as cryptocurrency, there are always risks involved.”

Cryptocurrency at this current stage is unregulated.

The Bank says this makes it difficult to put in place procedures that will protect the public because the “lack of regulation will attract criminal participation such as fraudsters and scammers (pyramid schemes). 

“It can also be used for money laundering purposes and tax evasion.

“There is currently a lack of information and public awareness as to how these cryptocurrency works, as such, this will often lead to people making ill informed decisions, such as investing in get rich quick schemes.

“There is also a high risk to Samoa’s economy because certain cryptocurrencies may pose a security risk, such as vulnerability to cybercrime, and as a result, cause significant damage to our financial system and infrastructure. 

“C.B.S. encourages the public to be alert and aware of these schemes. They may look like an attractive investment to quickly make more money, but you risk losing all your hard earned money without any possibility of recovering it.” 

Should you require any further details on this, please contact the Financial Intelligence Unit of C.B.S.

© Samoa Observer 2016

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