Paramedic-turned-bitcoin entrepreneur Sphelele “Sgumza” Mbatha’s home was set on fire by protestors, who were upset due to the collapse of his Ponzi-like “investment scheme,” as per Ladysmith Gazette.
Bitcoin Wallet, the company owned by Mbatha, promised 100 percent returns to investors through its investment of South African rands in cryptocurrencies. The firm shut down its operation on July 4, Mbatha believed to have been taking in more than R2 million, approximately $140,000, in cash deposits per day.
Mbatha appeared on Nqubeko FM in Ladysmith on July 9 to explain that a phishing scam has compromised some investor’s accounts. Mbatha stated that Bitcoin Wallets did not have “no cash” and that he was arrested.
Following which a 200 person crowd gathering in front of Ladysmith police station, demanding to see the Bitcoin Wallet’s manager. Tension was high as investors were unable to reach Mbatha since the shutdown. One investor asked that the crowd not react too quickly:
Reports from the following morning to indicate that Mbatha had not been arrested, as the police could “only act if investors open cases against the Bitcoin Wallets manager.”
A crowd gathered around Mbatha’s house on Wednesday afternoon to ask for his manager. Following the home’s ignition, an anonymous person on the scene was interviewd by TimesLIVE, stating that angry investors were seeking vigilante justice.
It is unclear how many Ladysmith residents invested in the operation. However, Mbatha did stop accepting deposits below Rs 5,000 at one time. PoliceUpload a complaints affidavitFor those who lost their money in the scheme. They wrote:
The completed form should be returned to Ladysmith police station along with your Bitcoin Wallets receipt and a copy your ID.”
