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. During an earlier radio interview, he stated that Bitcoin Wallets did not have “no cash to payout.” The social media was abuzz with rumors about Mbatha’s arrest that evening.
Following which a 200 person crowd gathering in front of Ladysmith police station, demanding to see the Bitcoin Wallet’s manager. Tension was high after investors reportedly couldn’t contact Mbatha following the shutdown.
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 citizens contributed to the operation. However, Mbatha did stop accepting deposits below Rs 5,000 at one time. The Police uploaded a complaints affidavit for those who have lost 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.”
Mbatha seems to be on the run at the moment.
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