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British investors are left scratching their heads and counting losses after investing thousands of pounds in an alleged cryptocurrency pyramid scheme called Lyfcoin, local media reported Tuesday.
Lyfcoin described itself as a brand new cryptocurrency staking platform for ERC-20 tokens with 100% transparency. The platform claims to support other crypto activities such as trading, shopping, information sharing, and much more.
While Lyfcoin is reportedly based in Europe, it claims to operate globally and is “fully compliant with stringent regulations.”
A Pyramid Scheme
However, investors claimed that the platform operated like a typical pyramid scheme that requires existing users to refer new members.
Several investors noted they were recruited by a man named Sakhi Rezaie, who organized presentations and seminars either through zoom or at his Birmingham office.
Investors claimed they bought Lycoin tokens at $1.60 each. However, the cryptocurrency value plunged to 8 cents on the in-house exchange, the report said.
The victims believe they have been duped since the platform did not keep to its mouthwatering promises. Lyfcoin allegedly told investors that they would receive high returns if they lock their funds for five months via staking.
However, as the deadlined approached, the platform suddenly informed investors that they would have to wait for 12 or 24 months before withdrawing their funds.
Unfortunately, investors said they couldn’t use the Lyfcoin tokens to buy goods and services. They also could not sell the tokens on any crypto exchange.
The report alleged that UK investors lost an estimated £2.5million ($3.2M) to the scheme. Some victims claimed they invested their retirement funds, hoping they would double their money. Others revealed that they are now indebted to the family members they referred to the website.
One victim, Atif Hussain, 38, who was laid off during the COVID-19 pandemic, told local media that he’s been having “sleepless nights” thinking about how he will not recover his money.
“It’s very, very stressful. The rest of my family haven’t taken it very well. I promised my mum that I’m going to repay her. It’s not fair because I introduced her,” he said.
Police Say No Case
Lyfcoin victims have little to no hope of recovering their funds. The report revealed that a group of 14 investors who collectively lost £100,000 (appr. $130,680) is pushing the British authorities to take action.
However, some victims claimed the authorities were quick to dismiss their complaint, noting that it is a civil matter or “a business deal went wrong.”
“Lawyers accused the City of London Police of ‘failing to investigate adequately, or at all’ after dropping their probe into the $4billion pyramid scheme around December last year,” the report added.
Speaking to the media, a West Midlands Police spokesperson said they had found no case. “We were investigating a report of suspected fraud involving cryptocurrency which was reported to us in May this year. Following inquiries, it was found that no offenses have been committed.”