South African company suspected to be a crypto pyramid scheme

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Ladysmith, South Africa-based investment company Bitcoin Wallet is arousing suspicion in the country. It is believed to be a pyramid scheme, registered as an ordinary investment company.

The company has attracted thousands of investors from the area. They advertise that one needs to deposit as little as $7.12 and get 100% profit within 15 working days. With no one wishing to be left behind, thousands of people queued outside this company’s offices eager to deposit their cash and get lucrative returns in two weeks.

A video of a woman flashing crisp R200 notes ($14.24), has been trending on social media. She claims she got them from this company. This video has many questioning the company’s business model.

The company’s CEO, Sphelele Mbatha, has defended himself saying that his company a legitimate firm. He claimed that the deposits made on the Bitcoin Wallet account are used to reinvest in SegWitCoin (BTC). He buys BTC and then sells at a higher price. He claimed that by selling at a higher price; he gets twice the money in only three hours. The investors, in turn, get a 100% profit within the stipulated time frame.

Around 2,500 people go to the office every day with others having to wait for days to be able to get in. Some of the people camp right outside the office so that they may get their turn to go in. Others light fires to keep themselves warm during the night. There has also been a lot of traffic in that area with enterprises operating in the same building having a difficult time accessing the building.

Residents who have been investing with the company also defended it, claiming that it is only an investment company and not a pyramid scheme.

The police spokesperson said that they are investigating an alleged pyramid scheme operating in Ladysmith, but did not say if Bitcoin Wallet is connected to the investigations.