BUUMBA CHIMBULU writes
THE Bank of Zambia (BoZ) has cautioned investors from being lured into investing their money in crypto currencies as most unscrupulous people where using this to engage in money laundering.
A crypto currency is a digital asset designed to work as a medium of exchange that uses strong art of writing to secure financial transactions.
BoZ deputy governor operations Bwalya Ng’andu, said the central bank was concerned with the increased schemes which investors had been rapidly subscribed to.
Dr Ng’andu said investors were promised returns on their investment in some cases calculated on the basis of 1.5 percent per day or a promise to triple their investment within one month.
He was speaking in Lusaka at the official opening of the Conference of Western Attorney General Africa Alliance Partnership (CWAG AAP).
“The broad purpose of this workshop goes beyond dealing with concerns that might arise from shortcomings and risks associated with the failure to prevent crime and abuse of cryptocurrency technology.
“Some of these risks include as I have said before fraud and the lack of consumer protection against fraud but it can also include money laundering and financing of terrorism activities,” Dr Ng’andu said.
For regulators, he said, the development that the cryptocurrency technology could facilitate organised crime was disconcerting as more often than not criminals were quicker on the uptake understand the how to use innovative products to defraud unsuspecting users.
Dr Ng’andu said “the unfortunate thing is that these schemes have been rapidly subscribed to; the catch being that their money will be invested in crypto currencies.
“Since the dynamics of these currencies are largely unknown, these investors are easily lured by “techno mysticism” and for this reason investors feel no obligation to enquire into the underlying economic activity that would generate such returns.”
