South African man has house set on fire following failed BTC ponzi scheme

11 Jul, 2019
by Ryan Boltman
South African man has house set on fire following failed BTC ponzi scheme

A South African man has had his house burned down due to a Bitcoin ponzi scheme failing

IOL reports that a mob of angry investors in Ladysmith, flocked to the investment schemes founder after not receiving their funds back in a program simply called "Bitcoin Wallet". 

The investment scheme offered investors the opportunity to double their money within two weeks through cash deposits. The ponzi scheme was operated by Sphelele Mbatha, a local who operated as a paramedic for 11 years previously. 

Mbatha sold the idea to locals, stating that deposits from investors would be reinvested into cryptocurrency and eventually sold back into fiat currency at a higher price. 

While the promises are extremely outlandish, and ideally rely on the market climbing 100% every two weeks, locals with little knowledge on how digital assets work or who were simply blinded by greed decided to jump in. 

Mbatha had originally blamed a lack of progress on the local municipality, claiming they had asked the investor to move his offices. The Alfred Duma local municipality denied this, saying "We did not even give him a letter instructing him to vacate the premises or close down. We did not do that. We merely gave him a chance to find new premises from which to operate at his convenience." 

Mbatha took to the local radio station on Tuesday to announce that the investments Bitcoin wallet's website had been hacked and that investor funds had been lost. Mbatha had earlier admitted to the local newspaper that he had no more cash to pay out to clients after living a lavish life and throwing parties, while handing out cash to the local community. He also stated that he was not the owner of the investment scheme, but rather the manager. 

On Wednesday morning an angry mob gathered outside of Mbtaha's home and upon realizing the conman was not at the premise, the mob began looting the house and eventually setting the house and a BMW motor vehicle on fire. 

The case is under investigation.

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