Egyptian authorities have arrested 29 individuals, including 13 foreign nationals, for allegedly running an online cryptocurrency scam in Egypt that defrauded thousands of investors, according to state media reports. The network, which operated under the name “HoggPool”, reportedly earned about $620,000 by luring victims with fraudulent means and promising financial gains through cryptocurrency mining and trading services. The scheme charged fees at an attractive foreign exchange rate, and was illegal under Egyptian law, with potential penalties including imprisonment and fines of up to $325,000.
The network suddenly shut down operations in February, and authorities later discovered that they had vanished with investors’ money. The suspects were allegedly planning to launch a new platform called “Riot” when they were arrested. The arrests come as Egypt grapples with one of its worst-ever economic crises, with the value of its pound depreciating by nearly half against the US dollar since March 2022, and inflation surging to 25.8 percent in January, the highest level in five years. The crisis has left nearly 60 percent of the country’s 104 million citizens below or close to the poverty line, and many lower-income households reliant on government subsidies for basic goods like bread.
Why are people turning to cryptocurrency scam in Egypt?
The Egyptian government has been struggling to stabilize the country’s economy amid ongoing challenges, including years of government austerity, the coronavirus pandemic, and the fallout from the war in Ukraine. Egypt is the world’s largest importer of wheat, with most of its imports traditionally coming from Russia. However, the currency crisis and inflation have significantly affected the country’s ability to import essential goods, leaving its population struggling to access basic necessities. The government has responded by implementing measures such as increasing subsidies for food and fuel, increasing public sector salaries, and launching infrastructure projects to create jobs.
However, these efforts have not been enough to address the underlying issues, and the country continues to face significant economic challenges. The recent cryptocurrency scam in Egypt is just one example of the types of fraud and financial crimes that have become more common in the country as people seek ways to make money in difficult economic times.
Despite these challenges, there are some signs of hope for Egypt’s economy. In December 2022, the country received a 46-month arrangement under the Extended Fund Facility (EFF) for Egypt in an amount of about US$3 billion by the International Monetary Fund to support its economic recovery efforts.