When 37-year-old Harshana Pathirana quit his job in the hotel sector, sold his car, and invested in what he believed was a cryptocurrency, he dreamed of making a fortune, especially as the economy around him cratered.
More than a year later, with the tourism sector battered in the face of Sri Lanka’s worst economic crisis, Pathirana is unemployed and has lost all his investment.
“I invested 2.2 million Sri Lankan rupees ($6,162) and was promised a five times higher return. But I only received about 200,000 Sri Lankan rupees ($560.20),” Pathirana told Al Jazeera. “I lost everything.”
Pathirana’s name has been changed to protect his identity as his family is unaware that he has lost his money. “My family thinks I sold the car and deposited the money in my bank account,” he said. He is now trying to migrate to find a job and earn some money.
Pathirana is one of the many Sri Lankans both locally and overseas who claim to have been deceived by a group of men that ran a fake cryptocurrency investment scheme and swindled millions of rupees. While it is not clear how many people in a total claim to have been duped, one person that Al Jazeera spoke to said easily a thousand people had joined in his district alone, and that since the model worked on bringing on new investors, the scheme had a cascading effect.
These investors are feeling the pinch amid Sri Lanka’s economic crisis which has seen inflation hit 60.8 percent in July, causing acute shortages of essentials, and making basic meals almost unaffordable.
The scam is said to have affected professionals like doctors, security personnel, and people from lower middle-income backgrounds in rural districts, mostly between the ages of 30 and 40.
Some of those who spoke to Al Jazeera were Sri Lankans who had made investments while working in countries like South Korea, Italy, and Japan.
Most of them had given up their jobs, pawned their jewelry, mortgaged their property, and sold their vehicles to invest all they could, hoping they would receive significant gains.
“If I had my money today, I could have opened up a fixed deposit account and used it to improve the economic status of my family,” Roshan Marasingha, 38, who spoke to Al Jazeera from South Korea, said.
He said that he had invested 3.1 million Sri Lankan rupees ($8,683) and received only 550,000 Sri Lankan rupees ($1,540) in return.
“Unfortunately, we were the bottom-level investors in their pyramid (scheme). So we didn’t receive the return that was promised,” Marasingha lamented.
In official papers filed with Sri Lankan authorities, the investors say that in early 2020 Shamal Bandara, a Sri Lankan, and Zhang Kai, introduced to the investors as Chinese, had set up “Sports Chain”, which they said was a cryptocurrency investment platform.
They are alleged to have run their operations as a Ponzi scheme, a fraudulent venture in which existing investors were paid with funds collected from new investors.
On its website, Sports Chain calls itself a “highly profitable” and “anonymous” venture, which aims to “become a steadily rising cryptocurrency used in the digital finance of the sports industry”.
Sports Chain’s website is riddled with grammatical errors and promotes itself as the “world’s first competitive public chain platform”.
However on CoinMarketCap, a website for tracking crypto assets, there is no “Sports Chain” cryptocurrency registered or trading in the market.