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:
Please don’t kill him now 😰. He still has my R16 000 Bantu..#sgumza
— dope kid wenzi (@weezywenzile) July 10, 2019
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,