Kuwait cryptocurrency scam: 40 million dinars lost in ‘Bitcoin Kuwait’ fraud

Dubai: A wave of cryptocurrency fraud has struck Kuwait, leaving investors stunned after an estimated 40 million Kuwaiti dinars ($130 million) disappeared in just hours.

This financial blow, one of the largest in the country’s digital trading history, followed the collapse of a newly introduced cryptocurrency called “Bitcoin Kuwait.”

Traders had invested heavily in the asset, only for it to collapse almost immediately after its launch.

The scheme, allegedly orchestrated by an anonymous developer over three years, was first exposed by Dr. Safaa Zaman, a professor of computer science at Kuwait University and president of the Kuwait Society for Information Security.

Dr. Zaman took to social media platform X, revealing that the creator of “Bitcoin Kuwait” vanished with the funds, leaving behind many victims—mostly young and inexperienced investors.

“Where is the oversight, where is the legislation, and where is the fraudster?” she asked, pointing to the regulatory failures that allowed such a massive fraud to unfold.

Despite the Ministry of Commerce and Industry’s refusal to license Bitcoin trading in Kuwait, no effective safeguards are in place to protect the public from cryptocurrency scams.

Dr. Zaman noted that the Central Bank of Kuwait officially prohibits dealings with digital currencies, but enforcement measures remain weak.

Lack the financial literacy

She emphasized the vulnerability of young traders, many of whom lack the financial literacy to navigate the risky world of cryptocurrency.

A study she conducted found that nearly 60% of cryptocurrency traders in Kuwait are young people and gambling enthusiasts, making them particularly susceptible to financial manipulation.

Public enthusiasm

Dr. Zaman has called for urgent legislation to criminalize cryptocurrency transactions, warning that without legal deterrents, fraudulent schemes will continue to thrive. She also urged authorities to hold accountable the intermediaries who promoted “Bitcoin Kuwait” over the past three years, whether directly or through digital platforms.

She also raised concerns about the role of newspapers and digital media in fueling the public’s enthusiasm for cryptocurrencies. Dr. Zaman criticized local media outlets for encouraging young Kuwaitis to invest in digital assets, arguing that their coverage contributed to an environment ripe for financial scams.

“The mastermind behind ‘Bitcoin Kuwait’ operated freely for three years, deceiving investors and disappearing with millions,” she said.

Dr. Zaman drew parallels with past financial collapses, such as the example of a major Chinese bank that traded in Bitcoin, only to suffer catastrophic losses that led to its bankruptcy.

The case of “Bitcoin Kuwait” is not an isolated incident. Digital fraud is becoming more sophisticated, with cybercriminals using fake websites, hacked social media accounts, and even fabricated celebrity endorsements to lure victims.

Dr. Zaman also highlighted the case of a Kuwaiti engineer who lost 300,000 dinars ($975,000) in a fraudulent digital trading scheme, forcing him to sell off most of his assets. She warned that even minimal experimentation with Bitcoin or digital stocks could lead to devastating financial losses.