Pipcoin, one of the South African based “cryptocurrency” projects has been a major source of contention over the years. We hereby write to pour more light at the controversies surrounding Pipcoin and also highlight a few reasons why the project is most likely to be a scam.
The heads behind Pipcoin
David Schwartz and Ref Wayne Nkele founded and established Pipcoin back in the year 2016. However, very little is known about Schwartz while there is a lot of information about Wayne Nkele. Ref Wayne Nkele happens to be a forex trader from South Africa. He calls himself a self-made billionaire. In addition, he has made several appearances on South African televisions, and radio stations in order to promote his company, African Forex Institute.
The African Forex Institute is a South African forex trading company that claims to train people on how they can make money through online trading. Behold, Wayne Nkele started this company behind the back of his popularity and large social media following. African Forex Institute promises to make people millionaires through its paid groups and events. Unfortunate for Wayne Nkele, his business model that had also been made popular by the famous Sandile Shezi of the Global Forex Institute was clamped down upon.
Behold, it was alleged that although these trainers charged for a premium membership, their content came from free sites that charged absolutely nothing. It was at this point that Wayne Nkele had to move into a new industry, which was rapidly raising in interest and popularity during the year 2016. Note that as of 2016, South Africa was among the top 10 countries with the highest search volume for the keyword Bitcoin. Later in 2017, not very long, South Africa became number one on the same metric on Google trends. And with the growing interest, Pipcoin became extremely popular across the nation.
How does Pipcoin claim to work?
In simple terms, Pipcoin describes itself as a revolutionary “cryptocurrency” that provides an investment opportunity that pays interests to all its members on a monthly basis. The Pipcoin project promises up to 35% of interest every month to all individuals who purchase the cryptocurrency. It is important to understand here that the cryptocurrency was launched without any blockchain or code to backup its existence and creation. It is due to its outlandish claims that Pipcoin gained a lot of popularity, making it a very popular crypto-related investment.
Why Pipcoin is likely a scam
Truth be told, Pipcoin has all the markings of a classic Ponzi scheme. Firstly, it guarantees that your investments will grow at least 1% every day and up to 35% by the end of the month. There is just no clearer red flag than this. Secondly, Pipcoin lacks the feature of all legitimate cryptocurrencies. That is, the project has no code backing its existence, no mobile or desktop wallet, no working blockchain explorer, and no exchange support. From the beginning, Pipcoin had no record of its “blockchain” until it launched Pipcoinchain.com, its own version of a block explorer which never worked as it was suppose to. Also note that the block explorer has no record of Pipcoin transactions. Rather, it contains records of bitcoin transactions. Another important detail about Pipcoin is the unavailability of an inflation model or coin supply information.
List of Red Flags
- Its website is offline
- Makes claims of impossibly high guaranteed monthly returns
- The company has failed to pay investors
- Claims that investors cannot lose their investment
- The technical details on the project are sketchy