South African Crypto Ponzi Scheme Affirms It Has No Money To Pay Duped Investors

South African Crypto Ponzi Scheme Affirms It Has No Money To Pay Duped Investors

There is one reason not to invest in Ponzi schemes: you will be scammed. Sure, you can believe that you will have a degree of success in case you go in and get out pretty quickly, but the truth is that you will generally only lose money. This is exactly what happened to the investors of Bitcoin Wallet, a lucrative South African Ponzi scheme with a pretty uninspired name.

According to the Ladysmith Gazette, hundreds of South African investors put their money on the company and expected a high return on investment. They obviously were not able to get it. As of July 4, the company basically shut down.

Bitcoin Wallet promised returns of over 100% for investors in only two weeks. Despite how absolutely fishy this sounded, a lot of people were attracted to the investment.

Now, these investors want to know what was done with their money because the company affirmed that there is no money anymore and simply shut down. The founder of the project, a man named Sphelele “Sgumza” Mbatha, affirmed that he simply has no cash to pay the investors, so he had no choice but to shut down the business entirely.

The business was reported to receive over $2 million USD in deposits daily. In fact, there were so many people trying to get the money that they limited investors if they weren’t able to offer at least $350 USD (5,000 rand).

When asked how this happened, the founder of the Ponzi scheme only affirmed that he “didn’t know what was going on”. Far from an acceptable answer, obviously.

Also, there are suspicions that the license of the company was forged and that the creators knew right from the start that they would eventually scam the investors, which is basically the least surprising rumor ever.

In order to run its scam, Mbatha took a 10% “administrative fee” over the money deposited, which was possibly how he got so rich by fooling others and eventually ran out of money as, like in any Ponzi scheme, he was probably using the money that entering in order to pay the investors that were cashing out.

Mbatha, which has stated that he was only a “manager” of the project, affirmed that he has stopped working and that he was using an “online system” to get the money and was also awaiting for payments just like the other investors.

People are obviously pissed with him now, especially as Mbatha basically turned into a local celebrity after the success of the scam, but they will probably never get their funds now.

This is why it is important to never invest in Ponzi schemes. If something has a return of 100% in only two weeks, wouldn’t everybody invest in it?

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Author: Gabriel Machado

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