Bitcoin Ponzi scheme in South Africa part 2 – it all ended in flames
As I mentioned in a previous post a few days ago, naive South Africans have been lured into a classic Bitcoin Ponzi scheme in Zululand, where education standards leave a lot to be desired. Basic schooling is limited, what to speak of financial education. Cryptocurrency education is probably even lower, but thousands of people were lured into a scheme called Bitcoin Wallet, only to learn the hard way what a pyramid scheme is.
Estimates of around 1700 people have been duped by the scammer and have lost their investment. Some had apparently traveled for hundreds of miles, all the way from the big city of gold in the north, namely Johannesburg, to come and personally bring their life savings for investment. They were all promised 100% returns or double their money in two weeks, which anyone who knows Bitcoin is impossible, even in the current bull market this year.
The scammer had set up shop in a run down office in the town called Ladysmith, in Kwazulu Natal Province, one of the poorest in the country, and naive locals were seen to be queuing outside the shop for days, often overnight in the winter cold, just to keep their place in the line to invest their money. In time municipality received complaints from neighbouring businesses about the congestion, at which point the scammer vacated the roadside shop, saying he was now doing business online only, and that only people with amounts not less than a few thousands in the local currency (a month’s wages on average) should bother to inquire.
Not long after that, perhaps a few days, by the sounds of reports, he announced that he had been hacked and that all the money was gone. Curiously he was also missing. This is when – on true African style – the mob took over. Around 1500 angry investors then went to the police station, thinking he had been arrested but he was nowhere to be found, so they went to his family house in the area and proceeded to set in alight. You don’t mess with the mob in Africa.
Not finding the scammer at home, they simply looted his house of all furniture, set his expensive BMW alight and also torched the house. The old roadside shop from which he originally traded was also looted, a safe ransacked and the shop emptied. The scammer is nowhere to be seen and no longer answers his phone. This entire pyramid scheme fraud all took place over a matter of the past few weeks or a month, from what I can make out in the brief news reports in local papers online. You can read the latest article here about how they torched his house yesterday.
Curiously the news even made it to the world’s most popular trading info site www.tradingview.com when this article shared the story. I have been following it for some days since and it was obvious this is a classic pyramid scheme. Unfortunately the locals have no financial education and are easily lured into get-rich-quick schemes, parting with their life savings. Cryptocurrency is unfortunately an open house for scammers and conmen because there is very little regulation in the industry. And that is why the mob – the masses – simply took the law into their own hands. They were unprotected by any police or regulatory board and did what they had to in the circumstances.
I pity the few that may have been injured in the fire, but also the poor victims of the Ponzi scheme, who had been initially praising the con man as the “Lord of Ladysmith”, the town in which he operated. He used to flash large sums of money around all the time and set himself up as their saviour. But he was a typical charlatan, who had systematically advertised with large billboards that he was running a Bitcoin investment scheme. You can watch this video clip from the South African television news to actually see and hear the details further.
Ultimately this kind of criminality and con artistry is going on all over the world in the finance sector, particularly in third world countries. In India there have been similar Bitcoin or cryptocurrency Ponzi schemes. There have even been outright ICO scams during the craze of 2017, where millions of dollars were defrauded from investors who were promised huge profits, based on nothing more than a white paper. And then I have also hear stories of people who are lured into online options and futures or margin trading sites run out of some offshore island.
And these high level or white collar scams are just as insidious or malicious, robbing investors of more in dollar value, but not as villainous as robbing the poor and uneducated of their life savings. It is a wicked world sometimes and thieves lie in wait to entrap you on every level, so it’s refreshing to occasionally find a really honest soul who only has your good interests at heart, who is willing to give you advice for free, willing to empower you to learn to trade for yourself and share in the potential fortunes to be made by buying Bitcoin or cyrptocurrencies.
I have learned all I know about Bitcoin, crypto, day trading and technical analysis (TA) for free online. I never had to pay a penny to get all the education I need to buy, trade, invest or sell Bitcoin at a profit. As a result I am here to teach anyone who is interested so that they can also be financially empowered to make their own profits, and not be left out of the prosperity loop because they are born poor. Be very careful out there when being offered courses at a fee or brokerage at a commission by an unknown investment company. Do your own research before investing in anything related to finance, and learn from the mistakes of others so that you don’t get tricked like the South African masses here in this report.