In a brazen attack that has sent shockwaves through Uganda’s cryptocurrency community, Festo Ivaibi, Founder of Mitroplus Labs and Afro Token, was abducted in May 2025, by armed individuals impersonating Uganda People’s Defence Forces (UPDF) operatives.

The assailants, dressed in military uniforms and wielding firearms, intercepted Ivaibi near his residence on Bunamwaya Road. Under duress, they compelled him to transfer $500,000 (approximately UGX 1.9 billion) in cryptocurrency from his wallets, including Binance, to their Trust Wallet.

Mitroplus Labs released a statement confirming the incident, noting that the attackers forced Ivaibi to access multiple crypto wallets and execute a small sale of Afro Token. This action briefly impacted the market, but it has since stabilized. The company emphasized that no community funds were compromised beyond the forced sale, and their tech and security teams acted swiftly to wipe compromised devices and secure all wallets.

A formal report has been filed with the police, and investigations are underway. Mitroplus Labs alleges the involvement of a syndicate comprising informants, rogue security operatives, police, and two Chinese businessmen. The statement claims at least 48 similar cases have occurred in Uganda, often dismissed due to the influence of this syndicate.

 

Rahmah Kizito, a crypto trader and fashionista, expressed his outrage and concern over the incident:

“I’m still processing what happened to my brother and friend Festo Ivaibi,” he said.

“A man who has poured his energy into educating and empowering others through crypto and Web3, abducted at gunpoint by thieves posing as UPDF operatives and in uniform, threatened, and forced to surrender his crypto wallets under duress. This isn’t just about money. It’s about the risks innovators face in unregulated environments.

We need protection. We need regulation. We need to make sure this never happens again.”

 

Kasim Mpanga, a crypto enthusiast, also voiced his support for Ivaibi on X (formerly Twitter), stating:

“We are heartbroken to hear about the horrific ordeal you endured. No one should face such a violation, and our hearts ache for you and your family. We keep you in our prayers as you navigate this pain.

Your resilience and commitment to a secure crypto ecosystem inspire us all. Stay strong.”

 

The incident has reignited calls for stricter regulation of Uganda’s cryptocurrency sector, which has seen a surge in scams and fraudulent schemes in recent years.

Thousands of Ugandans, Including a Senior Army Officer, Lose Billions in the Global Cryptocurrencies Limited Scam: https://t.co/u8tLKuTd9a #CryptoScam #Uganda

— BitKE (@BitcoinKE) December 10, 2019

According to previous report by BitKE, Uganda has become a hotbed for cryptocurrency scams, with schemes like OneCoin defrauding many Ugandans.

[TECH] [WATCH]FBI Offers $100,000 for Most Wanted Crypto Fugitive, ‘CryptoQueen’ – Founder of OneCoin: The Federal Bureau of Investigation (FBI) is offering a reward of up to $100,000 for information l.. https://t.co/ijyWDBIKDu via @BitcoinKE

— Top Kenyan Blogs (@Blogs_Kenya) July 4, 2022

Mitroplus Labs, a free learning hub for crypto education across Africa, reiterated its commitment to fostering a secure and transparent crypto ecosystem despite the challenges posed by bad actors. The company urged its community to tighten security protocols, practice safe wallet storage, and remain cautious about discussing assets publicly.

In a 2023 interview, Ivaibi highlighted the proliferation of crypto scams in Africa, attributing them to limited educational efforts and a lack of regulatory frameworks. He emphasized the need for governments to create a friendly environment for blockchain technology to grow while studying and learning how to regulate it.

New Vision, Uganda’s Leading News Daily Podcast, Talks Cryptocurrencies Following Recent Crypto Scams

The podcast advises users and investors to take time to research on cryptocurrencies before investing their money. https://t.co/lf2DCdUDIL @newvisionwire @blockchainug

— BitKE (@BitcoinKE) December 11, 2019

Despite the growing interest in cryptocurrencies, the Ugandan government has maintained a cautious stance. In a statement, as reported by BitKE back in 2020, the Ministry of Finance warned the public against cryptocurrencies, stating that the government does not recognize any cryptocurrency as legal tender and has not licensed any organization to sell or facilitate trade in cryptocurrencies.

LATEST: We Advise the Public to Desist from Investing in Unregulated Cryptocurrencies, Says State Minister of Finance, Uganda: https://t.co/Y2PETMhurQ #CryptoUG #BlockchainUG

— BitKE (@BitcoinKE) February 7, 2020

In 2021, as reported by BitKE, the Financial Intelligence Authority of Uganda (FIA Uganda) requested the Ministry of Finance to come up with a framework to help regulate cryptocurrency operations in the country. This request came following non-compliance by various crypto operators in the country to register their operations – a call which went out in late 2020.

The Financial Intelligence Authority of Uganda Seeks Cryptocurrency Regulatory Framework from the Government: https://t.co/uVNgBfVMCh

— BitKE (@BitcoinKE) May 24, 2021

In 2022, the Bank of Uganda (BoU) issued a circular to all payments service providers, especially mobile money operators, reminding them to desist from facilitating cryptocurrency transactions. As such, the apex bank further reminded payments players that its position on cryptocurrencies had not changed since 2019 when it stated that it did not allow financial service providers to facilitate trade in cryptocurrencies, or even trade directly.

Bank Of Uganda to Clamp Down on Mobile Money Operators Facilitating Crypto Transactions #cryptocurrency #mobilemoney #payments https://t.co/JAuX9lvdCr

— Patti Hewitt (@PaymentGal) May 3, 2022

As investigations continue, the crypto community in Uganda remains on high alert, advocating for increased security measures and regulatory oversight to protect innovators and investors alike.

LATEST: Ugandan Crypto Scam, DunamisCoin, Closes Shop After Defrauding Dozens of Investors: https://t.co/A9WoSD5AeL #CryptoScams

— BitKE (@BitcoinKE) December 7, 2019

 

 

 

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