Protestors Set Alleged Bitcoin Ponzi Scheme Perpetrators Home on Fire

Protestors set fire to paramedic-turned-bitcoin entrepreneur Sphelele Sgumza Mbathas home, following the collapse of his Ponzi-like investment scheme, according to Ladysmith Gazette.

Mbathas company, Bitcoin Wallet, promised investors 100-percent returns by investing South African rand in cryptocurrencies. Before shutting down the operation on July 4, Mbatha was believed to have been taking in more than R2 million, approximately $140,000, in cash deposits per day.

On July 9, Mbatha appeared on Nqubeko FM in Ladysmith to explain that some investors accounts had been compromised by a phishing scam. In an earlier radio appearance he had said Bitcoin Wallets had no cash to pay out.

That evening, rumors circulated through social media that Mbatha had been arrested, leading to a 200 person crowd gathering in front of Ladysmith police station, demanding to see the Bitcoin Wallets manager. Tensions were high, as investors had reportedly been unable to contact Mbatha since the company shuttered. One investor was pleading for the crowd not overreact:

Please dont kill him now . He still has my R16 000 Bantu..#sgumza

— dope kid wenzi (@weezywenzile) July 10, 2019

The following morning, reports indicated Mbatha had not been arrested, as the police could only act if investors open cases against the Bitcoin Wallets manager.

Wednesday afternoon, another crowd formed around Mbathas home, presumably to speak to the manager. Following the homes ignition, a TimesLIVE spoke to an anonymous person on the scene who said that angry investors were seeking vigilante justice.

A ponzi scheme in Ladysmith recently collapsed, and now angry investors have burnt down the home of the ponzi scheme owner#Sgumza

— Ngcolosi. (@BathuNgcolosi) July 10, 2019

It is unknown how many Ladysmith citizens invested in the operation, but at one point Mbatha stopped taking deposits less than R5,000.

Police uploaded a complaints affidavit for those who have lost money in the scheme. The completed form should then be handed in at the Ladysmith police station, together with your Bitco ...

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Tags: Bitcoin, Investor, Ponzi scheme, South African rand, Charles Ponzi, scheme