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Bitcoin Scam Generated $135,000 Daily From Thousands of Investors

By ValueWalk
FinTech, Blockchain

bitcoin scam
MichaelWuensch / Pixabay

South African investors are livid today, as reports surfaced yesterday regarding a Bitcoin scam that has defrauded thousands of people. The scam originated within a company called Bitcoin Wallet in Ladysmith, South Africa The firm allegedly claimed that it could produce profits of 100% for investors within 15 days. These promises of high returns turned out to be more lucrative than many of the investors could resist.

Bitcoin Scam Cashes In Big

The Bitcoin scam is somewhat of a Ponzi scheme, as it promised huge returns for investors, luring them to dump cash into the company. TechJuice reports that in some cases people were lining up outside the offices of the company and sleeping there overnight in order to invest their hard earned money in the cryptocurrency. The first hint of wrongdoing came last month, when Ladysmith police confirmed that they were investigating the possibility of a Ponzi scheme in town. However, they did not mention whether or not it involved Bitcoin Wallet.

The scheme worked well, as estimates show the Bitcoin scam was generating as much as $135,000 daily. People were all to happy to invest in something that promised huge returns, and the trap was set very well. Sphelele “Sgumza” Mbatha is the owner of Bitcoin Wallet, and he defended his company on a local radio station. He claims his company was dealing honestly with its clients and that all the money taken in was invested in cryptocurrency, just as they had promised. However, it appears that Mbatha’s company has made a mass exodus with the money, as hundreds of investors reportedly wait to hear from him at the company’s office.

If it’s too good to be true…

The old proverb  has been quoted for generations, and it still rings true today. “If it sounds too good to be true…it probably is.” This Bitcoin scam is not the first investment scheme of its type, nor will it be the last. Investment opportunities that promise 100% returns are almost certainly not honest offers. At best the promoters are inflating numbers to make it sound better than it is, and at worst they are con artists looking to milk you dry. Investors in Bitcoin Wallet are learning a very hard lesson, as many have lost their entire life savings. The average wage in South Africa added up to around $16,000 annually in 2016. In order for this scam to earn $135,000 daily it would equate to 9 people dumping their earnings for an entire year into the company each day. If the investment opportunity sounds like it is a once in a lifetime chance…run away.

This article was originally published in ValueWalk.

Photo: iStock

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