By CCN Markets: A cryptocurrency investment scheme in South Africa’s Kwa-Zulu Natal Province has proven that having an unoriginal name, Bitcoin Wallet, never stopped any scam from raking in tens of thousands of dollars daily from the masses.
According to The Citizen, the cryptocurrency scam is operating from Kwa-Zulu Natal’s rural town of Ladysmith. The scam is estimated to be drawing in R2 million ($135,000) daily in a town of just over 60,000 people.
The investment scheme owned and operated by Sphelele ‘Sgumza’ Mbatha is promising returns of 100 percent within 15 working days. Initially, the lowest investment amount allowed was R100 ($6.74). However, it has grown so popular that no amounts below R5,000 ($337) are being accepted. And due to its immense popularity, long queues are forming at its offices. Some ‘investors’ are even being forced to begin queuing as early as 3 AM.
Per The Citizen, Sgumza had indicated in an interview with a community radio station that he was generating profits for his investors by buying and selling Bitcoin. He only charges a 10 percent administration fee.
While trading Bitcoin is certainly profitable for some, guaranteed returns of 100 percent every three weeks are unheard of. Besides, cryptocurrency prices do not move in just one direction but can reverse thereby exposing trend traders to losses.
Additionally, there isn’t an instance when Bitcoin went up by over 100 percent in a three-week period. The closest it came to this was gaining 56 percent between May 1 and May 14. Since the 2018 low of around $3,200, Bitcoin has appreciated by over 160 percent.
Reports further indicate that Sgumza has turned into a local celebrity driving around in expensive cars and a police escort. He is also said to throw lavish parties and dishing out cash amounts indiscriminately.
But when contacted by an African News Agency reporter, Sgumza declined indicating that he would have to be paid to sit for one:
I actually don’t have a problem with giving you the interview, but how much are you going to pay me? If you are not going to pay me anything, then there is no interview. Call me when you have decided how much you are going to pay me.
Some businesses located near Bitcoin Wallet’s offices in Ladysmith have also distanced themselves from the investment scheme. This is out of fear that they might be mistakenly associated with the operation. Some of these businesses include shops operating in the vicinity.
While Bitcoin Wallet purports to be registered by various South African regulators, some of the documents appear to have been forged. Additionally, the investment scheme appears to be overcompensating by displaying documents at its offices from non-relevant regulators.
For instance, Bitcoin Wallet displays a certificate from South Africa’s credit industry regulator, the National Credit Regulator. The NCR does not regulate investment schemes.
Additionally, Bitcoin Wallet didn’t even bother to use the proper NCR font. They also seem to have forgotten to change identifying information from the documents they used as a template.
This article was edited by Samburaj Das.
Last modified: December 2, 2019 13:29 UTC