As the dreams of South Africans who put their money in Bitcoin Wallet hoping to double their money in 15 working days went up in smoke, so too did the property of the alleged operator of the cryptocurrency scam. According to the Times, angry investors…
As the dreams of South Africans who put their money in Bitcoin Wallet hoping to double their money in 15 working days went up in smoke, so too did the property of the alleged operator of the cryptocurrency scam.
According to the Times, angry investors in the alleged Ponzi scheme set on fire a house and other properties belonging to Sphelele ‘Sgumza’ Mbatha, the operator of the scam which was based in Kwa-Zulu Natal’s rural town of Ladysmith.
Among the items that were damaged in the blaze included a luxury vehicle belonging to Sgumza.
Prior to setting the house was set on fire, Sgumza’s house had also been looted with furniture and electronic items taken and driven away in a bakkie (light truck). It was not clear whether the looting was done by genuine Bitcoin Wallet’s investors or opportunists.
The angry mob had earlier been hunting for Sgumza to no avail. The hunt started on Tuesday night when frustrated investors flocked to Bitcoin Wallet’s premises trying to get back their money after news that the investment scheme had collapsed spilled out.
In the process, the staff of the firm were assaulted by the angry investors before being frogmarched to the local police station. False reports that Sgumza had been arrested had also led to a crowd forming at the Ladysmith police station.
Just weeks ago Sgumza had earned the nickname ‘Lord of Ladysmith’ owing to his ostentatious lifestyle. On the streets he became a crowd puller as Bitcoin Wallet’s popularity grew.
The trigger for the ugly turn of events came over the weekend after reports started emerging that the Ponzi scheme had closed shop after running out of money to pay investors. Bitcoin Wallet then denied the reports saying that they were only moving operations online in order to cater to the huge demand. Investors were encouraged to upload their details including providing sensitive banking information.
On Tuesday, however, there was another twist as Sgumza disclosed that Bitcoin Wallet’s website had been hacked. Conveniently, he claimed in a radio station that this had resulted in the funds belonging to the investors ending up fraudulent accounts.
Confidence in the investment scheme had also plummeted after Sgumza indicated that he was just an employee and not the owner. This was despite being listed as the sole director of Bitcoin Wallet’s parent firm, Bitcoin Wallets Achievers.
While the investment scheme had been operating for months it was only recently that serious investigations started. A complainant’s affidavit for those who lost money in the scam was only made available early last month.
The Hawks, South Africa’s special crimes police unit, has also taken up the matter.
Last modified: January 11, 2020 12:56 AM UTC