New Zealanders involved in suspected Bitcoin scam

The digital currency Bitcoin is booming, more than doubling in value so far this year.

However some Kiwis seem to have been sucked in by a scheme experts suspect is a scam.

It's 9 o'clock at night and Kawakawa truck driver Daniel Tepania is joining a video presentation about making money with Bitcoin.

The website is called "We Grow Bitcoins", which he recently joined, and is promising up to $200,000 profit a month.

"It's only been here about a month so I thought I would give it a go, sounded quite good," he says.

You make a donation of .01 of a Bitcoin - about $30.

Then you sign up five associates and they each "donate" the same amount to you.

Pay some more to get to level two then 25 associates donate to you.

Pay again to reach level three - then 125 associates pay you, and that equals 62 Bitcoins each month.

Mr Tepania says this is "about 200 grand a month and you can get that every month".

The man fronting the Kiwi video conference is Tony Waikato from Whanganui.

"It's a peer to peer crowdfunding platform that requires donations in Bitcoin," he says.

Newshub asked the Commerce Commission about wegrowbitcoins.com.

It hasn't received any complaints but referred us to its definition of a pyramid scheme, schemes which are illegal in New Zealand.

It says a pyramid scheme is one that "offers a financial return based on the payments made by new recruits".

"The return is dependent primarily on the continued recruitment of new members."

Consumer Law specialist Prajna Moodley goes further.

"I would go as so far as to say it's a simple scam, from what I can work this involves people investing money and never hearing from the company again," he says.

The website boasts about making a fortune but doesn't reveal who is behind it.

"The company seems to have a generic address like 1234 Street, Amsterdam; the people involved in this seem to have generic gmail addresses or dot RU, that is Russian," he says.

But Newshub's learned it's Charles Wurster from Texas, he has not replied to Newshub queries.

"He is a very very hard person to actually get a hold of, I can only converse to him through email," Mr Waikato says.

We Grow Bitcoins boasts about 1300 members worldwide and growing.

Members like Mr Tepania will be hoping their digital cash doesn't become a real life rip off.

Newshub.

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