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With a promise of 100 percent return in fifteen days, the South African cryptocurrency investment scheme ‘Bitcoin Wallet’ is raking in hundreds of thousands of dollars on a daily basis. The scandal was brought into the spotlight after a report by the South African news media website, The Citizen.
According to the report, Sphelele ‘Sgumza’ Mbatha has built a celebrity-like reputation for himself. Because of his bold claims about the astronomical return-on-investment, folks are lining up for an opportunity to invest. In the rural town of Ladysmith in the Kwa-Zulu Natal province, Bitcoin Wallet has become a phenomenon.
While this investment scheme checks all the boxes for a cryptocurrency scam, it has seen so much success because of the lack of awareness among the people. In fact, the list of wannabe investors is so long that Mbatha has had to increase the minimum investment amount from $6.74 all the way up to $337. Not only that, also because of its popularity, long queues are forming at its offices; people are waking up as early as 3 am to wait outside the company’s offices.
The Lie: 100 Percent Returns on Bitcoin Trading
In an interview with a community radio station, Mbatha revealed that he was generating profits for his investors by buying and selling Bitcoin. The only charges are his 10 percent fee for his services. While Bitcoin trading is somewhat profitable, returns of 100 percent every three weeks are almost impossible. In fact, Bitcoin has never gone up by 100 percent in three weeks. What’s more likely to happen is a depreciation in its prices, which just the first hole in Mbatha’s business plan.
Mbatha has also turned himself into a local celebrity. Throwing lavish parties, driving around in expensive cars and spending cash with zero accountability are all traits of a con artist at work. Furthermore, Mbatha has also refused to give an interview unless he is offered some payout.
He told an African news agency reporter:
“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.”
While he also claims that Bitcoin Wallet is registered by various South African regulators, some of the documents have been identified to be forgeries. All in all, unsuspecting investors are being robbed out of their money through this scam which sounds less like a legitimate cryptocurrency investment scheme and more like a glorified Ponzi scheme.