Hogg Pool case: half a million Egyptians victims of a cryptocurrency scam

The Hogg Pool company promised small savers to invest in cryptocurrencies.

© REUTERS/Dado Ruvic/Illustration/File Photo

Text by: Alexandre Buccianti

4 mins

Nearly half a million Egyptians have been defrauded by a company claiming to invest in cryptocurrencies.

The Egyptian media, which speak of the “scam of the century”, estimate the losses of the “investors” at more than 200 million euros.

The Interior Ministry announced that it had made arrests.

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From our correspondent in Cairo, 

The company under Egyptian law was officially called "Hogg Community Tech", but was better known as Hogg Pool.

She had obtained, in August, a permit for “

” and created a site “hoogpool.com”.

But very quickly, the company became known with a lot of ads on Facebook and via groups on WhatsApp.

Social networks to which more than half of Egyptians are registered.

Lavish receptions with well-known guests were also organised.

Hogg Pool indicated to its potential customers that it was investing in cryptocurrency.

Although this activity is illegal in Egypt, the fact that it yields, according to its promoters, "

in a few months made you close your eyes.

Hogg Pool has also created a free mobile phone application distributed by Google Play which has been downloaded over 600,000 times.

The investment started at 4,000 pounds, 200 euros in August, and was to bring in 10 euros per day.

Profits were cashable after 150 days.

The first investors started gleaning their profits in December.

Word spread like wildfire and investors, mostly small and medium savers, went from tens of thousands to hundreds of thousands.

A “Ponzi pyramid”

Hogg Pool applied the fraud scheme known as the “Ponzi scheme” where early investors are compensated with money from newcomers.

The principle had already been applied on a large scale in the 1980s and 90s by the “Islamic investment companies” which claimed to make colossal profits thanks to the “halal blessed by Allah” trade and more precisely by the black dollar market.

The collapse of these companies had cost the savings of millions of Egyptians, mostly small and medium savers.

► To read also: Financial scams: Africrypt, the biggest bitcoin scam of all time

Thirty years later, the scam was “secular” and the dollar black market replaced by cryptocurrency “mining”.

Hogg Pool received “investments” on the mobile application via credit cards, but also via “cash” transfers from the four Egyptian mobile telephone operators, many Egyptians not having bank accounts.

According to testimonies collected by the media, bride and groom were investing in Hogg Pool the savings intended to buy the furniture.

They thought that they could thus buy an apartment and furnish it.

Retirees invested their end-of-career indemnity in order to increase their income tenfold.

Public officials and private employees borrowed from their employers to invest in Hogg Pool.

There were even whole families,

29 people arrested

The devaluation of the pound and the rise of inflation above 25% in December reinforced the wave of investments in Hogg Pool.

The operation took on such a scale that it alerted deputies who raised the issue in Parliament.

They notably underlined the illegal nature of investing in cryptocurrencies, but also raised the possibility of a scam.

Faced with the proliferation of questions and doubts that have begun to settle among investors, Hogg Pool disappeared last week.

Website and mobile application inoperative.

The robbed savers poured out their stories in the various media, which sometimes made fun of their naivety.

Media that have not yet smelled "the scam of the century".

► Read also: Bitcoin scams are exploding in the United States

The Ministry of the Interior has just announced the arrest of 29 people, including 13 foreigners, who are believed to be the promoters and operators of Hogg Pool.

Computers, mobile phones and credit cards were seized, as was an amount equivalent to 20,000 euros.

A drop of water in the ocean.

According to the preliminary investigation, a good part of the money would have been taken out of Egypt via the purchase, precisely, of bitcoins.

Despoiled investors are wondering on social networks if the masterminds of the operation have not also fled, leaving lamplighters behind.

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