Protestors set fire to paramedic-turned-bitcoin entrepreneur Sphelele “Sgumza” Mbatha’s home, following the collapse of his Ponzi-like “investment scheme,” according to Ladysmith Gazette.
Mbatha’s company, Bitcoin Wallet, promised investors 100-percent returns by investing South African rand in cryptocurrencies. Before shutting down the operation on July 4, Mbatha was believed to have been taking in more than R2 million, approximately $140,000, in cash deposits per day.
On July 9, Mbatha appeared on Nqubeko FM in Ladysmith to explain that some investor’s accounts had been compromised by a phishing scam. In an earlier radio appearance he had said Bitcoin Wallets had “no cash to pay out.”
That evening, rumors circulated through social media that Mbatha had been arrested, leading to a 200 person crowd gathering in front of Ladysmith police station, demanding to see the Bitcoin Wallet’s manager. Tensions were high, as investors had reportedly been unable to contact Mbatha since the company shuttered. One investor was pleading for the crowd not overreact:
The following morning, reports indicated Mbatha had not been arrested, as the police could “only act if investors open cases against the Bitcoin Wallets manager.”
Wednesday afternoon, another crowd formed around Mbatha’s home, presumably to speak to the manager. Following the home’s ignition, a TimesLIVE spoke to an anonymous person on the scene who said that angry investors were seeking vigilante justice.
— Inland Finder (@InlandFinder) July 10, 2019
It is unknown how many Ladysmith citizens invested in the operation, but at one point Mbatha stopped taking deposits less than R5,000.
Police uploaded a complaints affidavit “for those who have lost money in the scheme. “The completed form should then be handed in at the Ladysmith police station, together with your Bitcoin Wallets receipt, and a copy of your ID,” they wrote.
As it stands, Mbatha appears to be on the run.
Bitcoin Wallets manager Sphelele ‘Sgumza’ Mbatha is still on the run and has not been arrested. https://t.co/kDIQraBcdS
— Local News Network (@looklocalsa) July 11, 2019
Image via Ladysmith Gazette.