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$130,000/Day Bitcoin Ponzi Collapses in South Africa, Then Reloads Online

Originally published on: CCN Markets
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July 09, 2019

Like all Ponzi schemes, South Africa’s cryptocurrency investment scheme Bitcoin Wallet is reportedly on the verge of collapse. The Bitcoin scam which was initially based in Kwa-Zulu Natal’s rural town of Ladysmith has allegedly run out of money to pay out to investors. At one point the Ponzi scheme was raking in more than $130,000 per day.

According to the Ladysmith Gazette, the public face of Bitcoin Wallet, Sphelele ‘Sgumza’ Mbatha, has revealed that he has exhausted funds to pay out investors.

While it had initially been reported that Sgumza started the crypto investment scheme, he has now changed tune and is claiming to be just an employee.

I was only the manager of the Ladysmith branch. I won’t continue working. I don’t have cash anymore.

Who hired this guy?

Sgumza also denied having any knowledge of how the investment scheme worked. This begs the question why he was employed in the first place without any knowledge of his job. Of course, this is assuming that his claim to be just an employee is to be believed:

I don’t know what’s going on. I don’t know online or how this system works. I have to be workshopped.

Sgumza now indicates that the only way investors will get their money is through Bitcoin Wallet’s website:

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.

Bitcoin Wallet: Allow us to steal from you remotely

On its website, Bitcoin Wallet repeats the same claims it had been making offline regarding investor returns. This includes promising to double investors’ money in 15 working days.

Per the website claims that the profits are generated from trading. This is allegedly done by dozens of professional traders who are spread in 5 countries:

We have over 150+ professional traders across 5 countries, these traders buy and sell crypto currencies daily and trade. The profits margins are then paid back to our investors…

Bitcoin Wallet also claims that since inception it has made more than 600 million (rand?). On a daily basis, Bitcoin Wallet claims to pay out approximately 5 million. Additionally, it claims to have attracted more than 35,000 active investors.

Bitcoin

Bitcoin Wallet on the lam?

Besides perhaps being a clever ploy to evade old investors or lure new ones (or both), the switch to purely online operations also coincides with increasing scrutiny on the Bitcoin scam. Just last week it was reported that police in Ladysmith were investigating a Ponzi scheme in the rural town.

When your company is called “Bitcoin Wallet” it’s definitely dodgy ->

Ladysmith cops probe Bitcoin Wallet Ponzi scheme allegations https://t.co/keO9HLQ19u

— Louis Nel (@LouisNel) July 4, 2019

And due to the large numbers of people who had been flocking to Bitcoin Wallet’s offices, traffic congestion had become prevalent in the neighborhood.

Additionally, Bitcoin Wallet had been accused of violating the by-laws of the municipality. The municipality’s legal department is also understood to have demanded documentation from Sgumza, a fact that could have made operating the scam offline untenable.

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