As promoters of Zugacoin, a Nigerian cryptocurrency ostensibly created to end poverty in Africa, continue to tout the token as a legitimate digital currency, there are growing reports on social media of merchants and holders of the coin who have failed to withdraw.
These allegations have given rise to claims that the project is just another fraud that has been deceptively passed off as a sophisticated cryptocurrency enterprise.
Zugacoin’s founder, Archbishop Sam Zuga, has in turn issued a burst of Facebook posts criticizing those spreading false information about the project in response to their complaints and accusations made against the cryptocurrency.
In one of his latest posts, Zuga said he was not engaged in cryptocurrency trading but was instead building a digital financial system to correct a financial future. He added that his crypto, which automatically gives you 200% profit of any amount you transfer to it, is only being used as a driver of the system in the future.
The founder refutes claims of manipulation within the Zugacoin ecosystem in the lengthy piece. In addition, Zuga’s post describes the ecosystem’s operation and the potential causes of some holders’ withdrawal issues.
He said:
“The only challenge is lack of knowledge from the users. Anyone can withdraw conveniently if the people that are withdrawing are less than the people who are depositing. No system can survive if what is going out is more than what is coming in.”
Zuga has vigorously defended the cryptocurrency initiative, but key participants in Nigeria’s blockchain industry have said they are still not convinced. As warning signs, they cite the project’s lack of transparency or its apparent abuse of Nigerians’ strong religious ties or their religious leaders.
One of the players, Ophi Rume, aka “Cryptopreacher,” said that unless the Zugacoin founder reveals the rest of the team behind the project it will be difficult to make a judgment about the project’s legitimacy.
Noting that scammers often exploit people’s desperation and ignorance, Rume, a blockchain analyst and educator, also said ordinary Nigerians should only consider investing in this project after doing some basic due diligence.
Rume added that when prospective investors learn or become aware of such details about this project they will likely decide against investing and thus preserve their meager savings.
Meanwhile, another expert who wished to remain anonymous lamented scammers’ growing use of religious titles when marketing their projects to unsuspecting victims. According to the expert, when a dubious cryptocurrency project is fronted by a religious leader, people will refrain from criticizing it.
The expert reported,
“I have found that no one wants to be seen as the prophet of doom or enemy of progress when it comes to big and questionable projects like Zuga. Besides, the founder is a Christian leader with a considerable following who has also used his influence to project Zuga out there. Remember Inksnation.”