A growing number of South Africans are getting into financial trouble by investing in cryptocurrencies like Bitcoin and Ethereum.
Debt Rescue CEO Neil Roets said many South Africans have been driven to the brink of bankruptcy after buying into cryptocurrency.
“We interviewed our first cryptocurrency victims towards the end of last year who wanted to go under debt review because they were no longer able to adequately service their debt,” said Roets.
“To my amazement, many of them had been the victims of scams involving cryptocurrencies which promised massive returns,” he said.
“Some of them had gone as far as pawning their vehicles, taking out second bonds on their homes, and borrowing money on credit cards in order to buy cryptocurrencies,” said Roets.
While certain consumers who approached Roets for debt counselling had fallen victim to hackers and scams, in most cases big losses were incurred due to the volatility of the cryptocurrency market.
Roets said total South African consumer debt is now close to R1.71 trillion, which shows that consumers have not cut back on spending.