Loopholes in crypto law
19 September, 2023, 4:47 pm
Gaming vouchers linked to cryptocurrency in the Ebay Shop Fiji scam has exposed regulatory loopholes that allowed what is suspected to be over $1 million from the scam’s ill-gotten gains to be remitted offshore without the knowledge of the Reserve Bank of Fiji.
RBF Deputy Governor Esala Masitabua said the purchase of online gaming vouchers was not illegal in Fiji.
However, it was being converted to cryptocurrency by the scammers and the wallets used to fool locals into thinking they owned something when they didn’t.
“The information that we have seemed to point to the use of credit card to purchase gaming vouchers and that’s not illegal in Fiji. I personally have done it for my grandchildren.
“The vouchers are tradable on other websites and eventually onto the crypto currency exchange where you can actually purchase cryptocurrency. The purchase of vouchers initially with your credit card is not an issue,” said Mr Masitabua.
Funds were being remitted offshore under the guise of purchasing gaming vouchers, bypassing the scrutiny of the central bank and fooling local victims of the pyramid scheme into thinking they have money in their accounts.
“Eventually (the vouchers) purchased the cryptocurrency which is owned by the scammers abroad, they send you a code, which you eventually log in here and then you upgrade your Ebay Shop account and you think you own something but no.
“It’s gone. You just owning the experience here and when you click out and want to cash whatever returns you have, it’s coming from somebody else who will never get that money. So that’s the unfortunate thing. Every person who has ever benefited somehow though this, it was from somebody else’s money. And that asset has gone. And I think that’s the sad story,” Mr Masitabua said.
A Multi-Interagency Taskforce headed by the Ministry of Trade and comprising of RBF, the Consumer Council of Fiji, the Fiji Police Force and the Fijian Competition and Consumer Commission, was formed last week to look into the Ebay Shop scam and future scams.
“We (the taskforce) are working with the bank (RBF) and we feel that there could be some loopholes and that’s something that we are investigating,” said Mr Masitabua.
He said Ebay Shop has collapsed but there are lessons to be learnt.
“It’s really hard now the things are happening online. What do you shut down? Do you shut down the Internet. Do you shut down the app? If they have a shop, do you just go and close them? So these are the challenges it’s happening electronically. It happens in a closed loop. Nobody wants to share that information to break in and get that information is so difficult. So it takes time, and the time that it takes to collect the information, the pyramid is growing. People get more defensive.
“They say there are three types of people in one that are greedy. The second are people who actually think that it’s true. The third are those who are just misled or they think like okay, this is an opportunity.
“So it’s very difficult and again, we feel like if we’re able to collaborate better, it’s a lesson that we learn that maybe, we can nip this in the bud. Hindsight is always 20:20 but we do sympathise with people who have lost money,” Mr Masitabua said.