In South Africa, the multi-million dollar cryptocurrency pyramid Bitcoin Wallet closed

The South African Bitcoin Wallet investment scheme, which attracted hundreds of investors a day, closed without returning deposits to its customers.

According to the local edition of Ladysmith Gazette, previously, many regulators and the media began to suspect Bitcoin Wallet in the work on the pyramid scheme. The company lured investors with promises of 100% return in just two weeks by reinvesting customer deposits into cryptocurrency.

Shortly before its closure, Bitcoin Wallet became so popular that it stopped accepting deposits of less than 5,000 rand (about $ 350). The African News Agency (ANA) news agency suggested that the firm received more than 2 million rand per day, which represents “the largest daily cash flow in all Ladies Smith.”

In a June interview, the founder of Bitcoin Wallet Sphelele Mbatha (Sphelele Mbatha) stated that his company was working legally, but ANA’s attempts to confirm the registration of the business were in vain. The news agency interviewed the Financial Services Authority (FSCA), which stated that the registrar’s signature on the Bitcoin Wallet certificate looked like a fake and needs further study.

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Despite reports of potential fraud, hundreds of local citizens have invested in the pyramid. According to ANA, investors lined up at the Bitcoin Wallet office to provide basic identification information, sign a one-page form, deposit as much money as possible and get 100% profit in 15 business days. At the same time, the company charged an administrative fee in the amount of 10% of the deposit.

When the founder of the scheme was asked about business transactions, he replied that the funds entrusted to Bitcoin Wallet were reinvested in cryptocurrencies, and then resold to the market at a higher price. Mbata refused a subsequent interview, saying that “time is money.” Now he claims to be the only “branch manager at Ladysmith,” and he no longer has the money to pay clients:

“I will not continue to work. I have no more money. The owner says that people should go online and get their money there. I myself have invested money there. I sent my bank details online and now I’m also waiting, ”he said. “I do not know what’s happening. I do not understand the Internet or how this system works. We need to figure it out. ”

Earlier, ANA reported that Mbata became a local celebrity and traveled in luxury cars with police escorts.

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Cryptocurrency pyramids do not lose popularity, despite the fact that regulators around the world reveal one scheme after another. In June, the CFTC filed a lawsuit against the organizers of the cryptocurrency pyramid for $ 147 million, and in April in South Korea, the organizers of the fraudulent scheme for $ 19 million were arrested.