Many South African Authorities have now joined hands in investigating what seems to be one of the greatest scams played in the country as well as a very major fraud in the world of cryptocurrency. The alleged Bitcoin Ponzi scheme has swindled unknowing investors out of 1 billion rands (equivalent to $80 million), reports Reuters. The Ponzi scheme had been working very well for the investors until one day where the alleged founder of the scheme disappeared and the system fell apart for everyone to realize what has been happening.
The Ponzi scheme had two primary stages of operation. The first stage was to persuade investors to invest large sums of money by initially taking small investments form the newcomers. The small investments were then quickly returned to the newcomers with a noticeable profit from the investments made by later investors. The first stage is what made the investors trust the system and invest large sums of money to the system for higher returns – the second stage.
The scheme was officially operated by a clean company named BTC Global. BTC Global took investments of unsuspecting people and offered them returns of 2% each day, which accumulated to 14% in a week and up to 50% in a month. The company is currently unattended and its business activities are suspended as of now.
The South African police issued a statement that says that the citizens of South Africa seem to have been targeted by the scam which was encouraged by agents of BTC Global. The statement also mentioned that some of the investors were paid initially but the payments stopped abruptly, causing red flags among the authorities.
Fin24 reported that a number of victims took the initiative to social media where the issue escalated. Later, the victims concluded that Twain – founder of the Ponzi scheme – never existed and was just an alias instead. Many people claim that Twain is a real person, authorities have not yet commented about any progress in identifying this person. Cheri Ward, a blog owner, said that she has been in contact with Twain over messenger and email but never in person.
Cheri ward told that she once pushed him for a video call by asking Twain to address all of his followers on Skype but Twain wouldn’t budge. Ward then had to give up as they thought that pushing him too hard would make him pull away.
BTC Global’s official website claims that the admin team cannot locate Twain at the moment and requests anyone with information to come out. The company’s statement also adds that everyone was aware of the risks when investing their money in this scheme – which was considered clean at the time.
According to Yolisa Matakata, one of the police investigators on the matter, the $80 million figure might just be an appetizer for a larger loss as thousands of people are yet to discover that they’ve been scammed.