Detectives have arrested two Kenyatta University students who are suspected to be part of a gang hacking into people’s credit cards and using them to buy Bitcoins, which they then convert into Kenyan money.
The two were arrested in the company of two young women during a raid on Wednesday at an apartment in the affluent neighbourhood of Milimani area in Nakuru where they have been operating from.
The Directorate of Criminal Investigations (DCI) alleges that two, after converting the money, then use it to live lavishly, entertain young women and buy property.
“The gang operating from houses in the affluent Milimani neighbourhood has been on our radar over the past few days and it was only a matter of time before our detectives smoked them out,” DCI said in a statement.
“In the sophisticated crime that is gaining currency in the country, the students create fake email accounts which they use to hack credit cards of innocent persons, especially those living in foreign countries.”
Some of the items recovered during the raid include a land sale agreement entered on May 25 for a property valued at Sh850,000 in Juja.
Other items recovered were five laptops, four mobile phones, two Wi-Fi gadgets, three hard drives and assorted SIM cards, all believed to be their tools of crime.
“Cyber forensic experts have since taken over investigations into the matter for a comprehensive analysis into the sophisticated crime,” DCI added.
Meanwhile, the two will remain in police custody pending arraignment.
Supporting cryptocurrency transactions
The arrests come just months after the Central Bank of Kenya warned financial institutions supporting cryptocurrency transactions that they risked losing their licences.
While speaking at the World Consumer Rights Celebration Day in Mombasa on March 22, CBK Governor Patrick Njoroge warned financial institutions supporting cryptocurrency transactions that they risked losing their licences.
“There are people who are excited about cryptocurrencies because they see it as an investment they can make money from,” said the governor.
Kenya has never prosecuted anyone for engaging in cryptocurrency scams.
The first time CBK came out strongly against the trade of cryptocurrency was in December 2015 when the Bitcoin craze was just beginning to catch in Kenya.
At that time, Safaricom was embroiled in a court case after the mobile giant discontinued the exchange of Kenyan shillings with bitcoins through the Lipisha platform.
And last week, President Uhuru Kenyatta put cyber criminals on notice, saying the new National Forensic Laboratory in Nairobi will help in reducing online crime.
The Head of State spoke at the DCI offices in Nairobi after launching the new facility.
“Criminals and their networks are using and utilizing advanced technology and interconnectivity to advance their nefarious goals. These shifts are the results of globalization and technology. This facility is critical because it will revolutionise our investigation techniques through cutting-edge science resulting in a safer and more just Kenya,” observed President Kenyatta.
Kenya currently leads in Africa in crypto adoption and is ranked fifth in the world ahead of some of the most developed countries like the United States, China, Russia, Germany and the United Kingdom according to Chainalaysis.
This mad rush into cryptocurrency trading has caught not only the attention of Kenyan investors but also scammers who have created get-quick-rich Ponzi schemes masquerading as cryptocurrency trading platforms. The losses have been colossal.