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posted by martyb on Thursday July 18 2019, @12:08AM   Printer-friendly
from the follow-the-money dept.

Angry mob burns down home of suspected Bitcoin swindler:

A man thought to have been behind an alleged Bitcoin Ponzi scheme has had his house looted and burned to the ground in South Africa, reports Times Live. Sphelele "Sgumza" Mbatha was reportedly the operator of "Bitcoin Wallets," a scheme which promised investors a 100 percent return on their investment after 15 days.

The arson came a week after Mbatha admitted to the Ladysmith Gazettethat he didn't have any more cash to pay out, and said that investors would need to submit their details online to receive their payouts. He also claimed to not be the owner of the company, despite having registered the business "Bitcoin Wallets Achievers" the previous week. The following week he then said that hackers had infiltrated the website and had stolen investor's money, according to Times Live.

Mbatha's whereabouts are currently unknown

The arson came after angry crowds had previously gathered outside Bitcoin Wallets' headquarters as well as the local police station. Mbatha was reportedly offered assistance by the authorities to relocate the company on the condition that he provided a business plan to prove it was legitimate. However, the documents had not been produced as of last week. A spokesperson from South Africa's National Credit Regulator had previously raised doubts about the company's official documentation.


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  • (Score: 1) by hwertz on Thursday July 18 2019, @04:56PM

    by hwertz (8141) on Thursday July 18 2019, @04:56PM (#868576)

    "Is this not ACTUALLY the definition of a Ponzi scheme?"
    Ponzi schemes by definition use the second round of investors money to pay off the initial investors, then "since the second round have seen the first round get paid off) a third round will pay in, and they may use some of the third round's money to pay off the second round.

    Oddly, Ponzi had a scheme that actually worked, it involved buying foreign stamps that were worth like 1/2 of a cent at face value, then cashing them at the post office for like 1 cent. The Ponzi scheme came in when, inexplicably he agreed to let people send him cash to buy 1/2 cent stamps and cash in for a cent (with a small fee for himself.) Well, once thousands of dollars came in, there was no way time-wise he was going to get 100,000s of stamps counted out and turned in at the post office.. and before long his cash apparently exceeded the entire available supply of these stamps anyway. Bam! Ponzi scheme.. he instead used later money to pay off earlier investors.

    That said.. expecting 100% return after 15 days guaranteed IS VERY STUPID. They should no better. That said, I don't feel bad if a greasy scammer got his place burned.