Bitcoin Interchange Exit Scam

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Bitcoin Interchange was a Zimbabwe-based investment platform which promised investors 35% returns. They had offices in multiple Zimbabwe cities including Harare and Chitungwiza. Investors lost over $766k through investing.

This exchange or platform is based in Zimbabwe, or the incident targeted people primarily in Zimbabwe.

About Bitcoin Interchange

"Phineas Chakanyuka, the alleged brain box behind the" "Bitcoin Interchange Zimbabwe" "scheme, had offices in Harare and Chitungwiza, Zimbabwe. A large number of investors were from these cities." "It is alleged that clients [were informed] that they would earn high percentage profits from investment." "The investors had allegedly promised profits of 35% after every two weeks on the initial deposit."

"They included offices at Freirn House situated at corner Speke Avenue and Harare Street and others at LAPF House, corner Chinhoyi Street and Jason Moyo Avenue, respectively."

"OVER 10 000 investors mainly from Harare and Chitungwiza, who invested between US$100 and US$300 000 in a Bitcoin scheme, were left counting their losses after the scammer closed shop without warning.

"I checked their website there are some functions that are not working. Like if you check the footer the social links are not working. Seems as if they don’t have a social proof. What I mean by social proof. There are little to no one talking about this business on social sites. Maybe is a new company I don’t know. Any bitcoin investment of this nature may not end well. If you decide to participate make sure you participate with money that you are prepared to lose. See people need conviction that it works. The first time you may invest $10 like you said if you get paid you would want to invest more and more."

"Chakanyuka allegedly closed all his offices without prior notice or warning to his clients. He also did not provide any means of contact as his mobile was unreachable, thus leaving investors counting their losses." "He claimed he had problems with the police and the Reserve Bank of Zimbabwe."

"43 people reported being swindled of US$765,935." "Some 43 people were left counting their losses after Bitcoin Interchange Zimbabwe Private Limited, represented by someone calling himself Paradzai Muchenga, swindled them of US$765 935."

"Efforts to get a comment from Chakanyuka were fruitless as his mobile was not reachable."

"He, however, sent a message on his various Bitcoin Interchange WhatsApp groups."

Part of the message read: “Our most valued clients. We are pleased to announce that we are still progressing very well. Our system upgrade was completed successfully. We are continuing to work tirelessly to resume operations. We had indicated that we will open on November 7 to November 14. However, there are still a few requirements that we are yet to complete on our side with our broker, the Reserve Bank of Zimbabwe and the police.

“Thank you for your continued patience in our very last phase towards official opening next year. Any inconvenience caused is sincerely regretted. Bitcoin Interchange is here to stay. Please note that your funds are available and safe. Once we get the greenlight we will pay everyone”.

"One of the investors, Peter Munyai, said he sold his house before lockdown and invested in the scheme."

“I am stressed. I sold my house and invested and now this guy is nowhere to be found. We are organising ourselves so that we make an official police report. Other disgruntled investors have already reported him to the police,” Munyai said.

National police spokesperson Assistant Commissioner Paul Nyathi said they were yet to receive a report from aggrieved parties.

“I haven’t received such a report at the moment. I will definitely give you details as soon as I get that information,” he said.

This exchange or platform is based in Zimbabwe, or the incident targeted people primarily in Zimbabwe.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Bitcoin Interchange Exit Scam

Date	Event	Description
November 18th, 2020	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $766,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

Having a large scale of investments occurring outside of any oversight and no widespread way to validate if a scheme is legitimate means that victims often have few resources to turn to when making decisions. Greater resources and education could greatly diminish the success of such plans.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.