An Instagram Influencer, Jay Mazini was accused of defrauding his followers of Bitcoins worth millions of dollars. He allegedly enticed them to sell their bitcoins at artificially inflated prices but the followers were never given any money for those tokens.
Cryptocurrency has started attracting a lot of frenzy and excitement along with a lot of scammers. The emerging technology has a very strong likelihood of replacing the traditional money. Crypto’s main charm is that it is decentralized, meaning thereby that there is no authority such as the government or bank overseeing it. Two people anywhere in the world can directly send each other money without a bank involved. However, it is this characteristic of the virtual currency only that has made it susceptible to online scams and frauds.
The Department of Justice of the US recently charged a famous personality on Instagram with wire fraud. A complaint against Jegara Igbara, alias Jay Mazini was filed in Brooklyn’s federal court. The complaint alleged therein that Igbara convinced his followers to send him their bitcoins in return of cash.
Igbara had also projected artificially inflated price of Bitcoin misleading people into believing that they would get huge returns.
Now according to the Department of Justice Igbara never lived up to his promises and no trade was made. He doped people into sending him their bitcoins without any money in return. Like this he had swindled his followers out of Bitcoins, the value of which amounted to $2.5 million.
The social media personality used his influencer status and online popularity to create a market for himself. In this market he projected himself as a buyer of Bitcoins, thereby scamming those who were interested to barter Bitcoins for fiat currency.
As per the complaint Igbara went by the name Jay Mazini on Instagram, with approximately one million followers. On his Instagram profile he would put up sham videos of him handing over huge amounts of money to individuals. Such videos made his followers fall for his false claims and pretense.
Details from the Department of Justice revealed that Igbara offered to purchase Bitcoin at 3.5%-5% more than its market value. He justified his willingness to pay more than market value by falsely claiming that Bitcoin trading platforms limited the Bitcoins he could buy.
The valuations for cryptocurrency companies can be wildly high which is why there is so much buzz surrounding it. But that also makes it a fertile ground for scammers. To buy cryptocurrency you have to use real money. While you don’t have to deal with a bank, you do have to deal with a third party change. This is what has led to people falling for such traps wherein they hope to get money in exchange of their digital tokens.