TL;DR: Bitcoin Wallets Ponzi scheme tensions continued to rise as investors in Ladysmith, South Africa recently discovered the company to be insolvent. After lines formed outside its offices, angry mobs eventually found the reported company head’s home, looting and then eventually burning down his private residence.
Bitcoin Wallets Ponzi Leader’s Home Looted, Burned Down
Regional news outlet Ladysmith Gazette had exclusive footage of mobs appearing to gather outside the home of Bitcoin Wallets head Sphelele ‘Sgumza’ Mbatha. As CoinSpice previously reported, Mbatha was linked to the project as its principal, though he claimed to only be a local manager.
Bitcoin Wallets offered unsophisticated investors a classic Ponzi scheme involving fiat taken in rand to purchase cryptocurrencies. The company promised 100% returns in 15 days. Reports insist 2 million rand a day passed through Bitcoin Wallets’ coffers at one point. Investment skeptics challenged the company’s basic math, and Mbatha appeared on radio defending its practices as essentially sound.
By last week, however, all began to unravel as the result of online wallets being hacked (claimed by Mbatha), an exit scam, or even a simple run on deposits by investors with buyers’ remorse (coverage had begun to sour). At least some combination of all three resulted in Mbatha finally urging Ladysmith residents to stop using Bitcoin Wallets online platform in recent days, and he stressed he too was a victim.
Lines continued to form outside company offices, however, and it seems investors who lost funds turned violent. “A large crowd of people who invested with Bitcoin Wallets in Ladysmith gathered outside Sphelele ‘Sgumza’ Mbatha’s home today (Wednesday, July 10),” the Ladysmith Gazette explained. “The crowd gathered there in the hopes of getting their money back. However, this did not happen, as nobody was at the house. The group of men and women took matters into their own hands by looting Sgumza’s home, taking anything of value they could get their hands on.” An update to that article showed a home with smoke wafting into the air, which the news outlet claimed was Mbatha’s house burning.
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.
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