South African Raking in $155,000 a Day Suspected of Running a Ponzi Scheme

A South African man running a Bitcoin investment fund in KwaZulu- Natal is suspected to be running a Ponzi scheme, as early investors have seen huge returns. The man was unwilling to talk to local media about his business plan and he how generates returns for his customers. His lavish lifestyle and police escorts spin an air off legitimacy, but the Financial Services Conduct Authority and National Credit Regulator have issued red flags due to discrepancies on the registration certificate, as reported by Citizen, June 17, 2019.

More Crypto Scams Flourish

Mbatha, the man suspected of running a Ponzi scheme in South Africa, is said to receive deposits for $155,000 on a daily basis, as people queue up to this office and stand in line for hours to invest with his fund. The company named ‘Bitcoin Wallet’ has zoomed in popularity and increased its minimum investments as a result. The lack of clarity and exuberance around the scheme is almost enough evidence to liken it to other cryptocurrency pyramid schemes.

Until recently, Mbatha was a paramedic and just another resident of a small town in KwaZulu – Natal. Today, he is quite possibly the most wealthy person in the region, often called ‘The Lord of Ladysmith’ owing to his extravagant parties and luxurious cars. The scheme is drawing out diverse crowds, local media captured retirees as well as young adults lining up outside the office to invest their money with Bitcoin Wallet.

The scheme takes 10 percent as an administration fee – a practice unreflected by legitimate investment funds across the world. Mbatha told Citizen that any time he spends away from his business is time wasted not making money, so if the media outlet would like his interview, they would need to pay him.

A media relations officer for the National Credit Regulator examined the certificates and concluded that they were counterfeit, as the fund was in the business of taking investments and not guaranteeing credit. The final nail in the coffin was the officer’s finding that the registration number belonged to a completely different business. The FSCA also argued that the certificate looked fraudulent and would need to be closely examined.