South African Crypto Scam Thrives Under Name “Bitcoin Wallet” Investment Scheme
There are a number of factors have the potential to undermine possible crypto adoption worldwide and spoil its reputation and one of these are scams. While scams exist in every facet of human life, particularly those that have to do with money, the crypto Industry is an emerging one and there is already a sense of distrust surrounding it due to misinformation among several segments of the population and thus, constantly having scams run rampant within the crypto industry does nothing to benefit its reputation overall.
Unfortunately, scams are fairly prevalent in all parts of the world and more are being uncovered every day including a new fake cryptocurrency Investments scheme that takes place in the Kwa-Zulu Natal province in South Africa that is called bitcoin wallet. Despite having a very all unoriginal name behind it, the scam has proved rather successful and is allegedly making over $130,000 on a daily basis.
Details About The Scam
A report by the Citizen states that the scam is operating in the province is drawing in roughly $135,000 a day in the town which is home to roughly 60,000 people. The scam is owned by operated by a man named Sphelele ‘Sgumza’ Mbatha who promises returns of 100% investment within 15 working days. As for the Investment, victims were told to invest him a minimum of $6.74 in the initial stage but the scam has proved so effective that now nothing less than $337 is allowed to be invested. The scam has become so popular that queues form outside the offices of the individuals running it and some people show up as early as 3 in the morning to get in on the action.
This is a rather interesting scenario as while the man in charge claims he generates profits for investors by buying and selling bitcoin and with only a 10% administration fee, these claims are wild and very unlikely. Trading in cryptocurrency such as bitcoin is certainly a profitable market but the return of 100% is outrageous for any business especially considering how volatile the crypto market is. The bear market has ended and cryptocurrency has seen a 56% increase between May 1 and May 14, 2019, but that's certainly would not justify 100% return and interest.
The man in charge of the scheme has also become a popular local celebrity and is known to throw lavish parties and drive around in exotic cars without explaining just how without explaining why all this money is coming from. When asked for an explanation or an interview he stated,
“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.”
The business has also been exposed for being rather shady as the Bitcoin Wallet claims to be registered by various other regulators but the documents presented have been claimed to be false and they also seem to be displaying certificates from regulators that have nothing to do with investment schemes. As a result, several local businesses such as shops have distanced themselves from the business lest they are accused of being a part of it.