“Bitcoin Wallet” Ponzi scheme causes chaos in South Africa

It looks like Ponzi scheme season is upon us.

Yesterday Decrypt reported that fraudulent investment platforms in both China and Australia have together stolen millions of dollars of unwitting investors’ cash. And yet, that’s not all. According to local South African news, a Ponzi scheme in Ladysmith has become so notorious—and is still running—that local people are queuing outside its doors overnight. And this is causing havoc in the small town.

The excitement kicked off when a video did the rounds on social media showing a woman placing a few thousand rands in cash on top of a car. She said that it was money earned from a local company called Bitcoin Wallet.

The company promises to double your money in just 15 days, but takes a ten percent cut. It’s likely that it is paying out later investors with former investors’ money, while building up its own reserves of cash. However, if the money stops flowing in, it’s probably all going to come crashing down.

Despite this, locals appear to be in denial. At the moment thousands are going to its offices every day to invest their money. Many are camping out overnight, paying to sit near a fire to keep warm or for a homeless person to stand queuing on their behalf.

“From what we have heard, Bitcoin Wallet is an investment, not a pyramid scheme,” said a local community member. “If you put in an amount of R100000ZAR ($7,000), you get back an amount of R200000 ($14,000) in 15 days.

However, Lebogang Selibi, media relations officer at the National Credit Regulator (NCR) told ANA news that it’s not a registered credit provider and has a fraudulent certificate. The local police has said allegations of fraud have been made but would not confirm if it was investigating Bitcoin Wallet.

It appears that Bitcoin Wallet doesn’t appear to have anything in connection with bitcoin or cryptocurrencies in general—apart from the name. Perhaps it was riding off the brand to convey an aura of respectability and legitimacy.