In the field of cryptocurrencies, the term ‘burning’ is usually used when tokens or cryptocurrency assets are destroyed for whatever reason. Despite this newfound meaning, disgruntled investors of South African ‘Bitcoin Wallet’ scheme took the word back to its roots when they set ablaze the house and Lamborghini belonging to a family member of Sgumza—the absconding manager of Bitcoin Wallet.
At its peak, the South African ‘Bitcoin Wallet’ scheme was supposedly raking in about $130,000 on a daily basis. The pyramid scheme was managed by a Sphelele “Sgumza” Mbatha from the city of Ladysmith in eastern South Africa.
The arson attack was carried out around a week after Sgumza admitted his involvement with the pyramid scheme to the local Ladysmith Gazette. Since his interview with the Gazette, Sgumza is reportedly still at large, with South African law enforcement still trying to locate the individual.
Initially, South African investors were lured into the pyramid scheme with flashy cars, high profile parties, high payouts, and promises of a life of luxury. At one point in time, more than 200 people were queuing up outside the office just so they could invest their money into the company.
The business website of Bitcoin Wallet still seems to be operational and claims to make trading profits equal to upwards of $43 million per day, while offering all its investors “100% growth in 15 working days”. Undoubtedly, such claims not only irked some of the investors but also regulatory authorities, since these profits would equal an unbelievable 2,400% in a year.
As a result, an investigation was launched into the company’s legitimacy and licenses which Sgumza claimed were original and unrebukable. However, the South African National Credit Regulator (NCR) claimed that the scheme is an ‘investment taker’, had no reason or eligibility to acquire an NCR certificate as they are strictly issued to ‘credit providers’ only.
Along with a bunch of red-flags raised against the document’s legitimacy, Lebogang Selibi, the media relations officer at NCR said; “The certificate is fraudulent. The font used on the name is not our font. The NCRCP Number used belongs to a different registrant. Name of branch – Not the NCR format. The certificate is not signed. The issue date and expiry dates are incorrect, our expiry date is 31 July each year.”
The investigation into the get rich quick scheme is still ongoing, however, we can’t help but doubt the logic of burning down the property that would likely be seized to repay the investors that were wronged by the Sgumza.
What do you think about the arson attack against Sgumza? Let us know your thoughts in the comments below!