TL;DR: African News Agency (ANA) is reporting Ladysmith, South Africa investors have been victimized in a classic Ponzi scheme. It involves an online startup called Bitcoin Wallets, which several regional outlets describe as popular enough to routinely garner 100,000 rand deposits at a time from locals who hoped they would receive lavish promised payouts of 100% profit after only a couple of weeks.
Bitcoin Wallets’ Big Promises Vanish
Sphelele ‘Sgumza’ Mbatha, pegged by local media as Bitcoin Wallets founder (he described himself as only a manager), is flabbergasted, dumbfounded. “I don’t know what’s going on,” Mbatha told the Ladysmith Gazette. “I don’t know online or how this system works. I have to be workshopped. The owner of the company is operating the online business. I was only the manager of the Ladysmith branch. I won’t continue working. I don’t have cash anymore. The owner says people must go online and collect their money online. I, myself, have invested my money in there. I submitted my banking details online and now I am also waiting.”
That’s a far cry from just last month when he and the project claimed relatively easy profits under the condition of minimum deposits. In fact, Bitcoin Wallets offered 100% returns in 15 days, and the lure proved so successful Mbatha reportedly upped minimum contributions to 5,000 rand. Various reporting further claimed regular investments of 100,000 rand were becoming commonplace. ANA put the figure at 2,000,000 rand in cash a day floated through the startup at various points.
— Yusuf Abramjee (@Abramjee) June 14, 2019
Skeptics found Mbatha’s initial claims too good to be true, and began documenting his lifestyle, which included flashy cars and even the occasional police escort. Journalists and lay investigators could find no official registration for the business, and the investment math smelled of a classic Ponzi scheme. Be that as it may, his offer also seemed too good to pass up for apparently thousands of South Africans. Lines were not uncommon outside Bitcoin Wallets Ladysmith office, where investors were asked only for identification and fiat, … assured funds would be used to buy booming cryptocurrencies (minus a small fee, of course).
Efforts to find custodians of the funds have reached dead ends, according to local reports. Only days ago, “a scuffle broke out as clients became upset with Bitcoin Wallets staff for not allowing them access to the offices. The atmosphere was tense, as people milled around waiting for answers,” the Ladysmith Gazette explained.
At one point, Mbatha assured offices were closed due to finding more suitable quarters to accommodate longer lines. However, according to the ANA, during a recent radio interview, “Mbatha said that the online platform had been rendered unsafe and insecure by hackers who had accessed investors’ details and stolen their monies.” He acknowledged customers were having trouble withdrawing funds, but blamed it on that supposed hack and advised not using the site’s online platform altogether. “[Mbatha’s phone] on Tuesday rang only twice before going off and did not allow for the leaving of any messages,” ANA reported.
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.
CONTINUE THE SPICE and check out our piping hot VIDEOS. Our podcast, The CoinSpice Podcast, has amazing guests. Follow CoinSpice on Twitter. Join our Telegram feed to make sure you never miss a post. Drop some BCH at the merch shop — we’ve got some spicy shirts for men and women. Don’t forget to help spread the word about CoinSpice on social media.