South Africa Authorities Investigates $50 Million Bitcoin Scam

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Justice may yet be within reach for to 27,500 people who were duped on in one of the biggest scams that have rocked South Africa. The South African police have swung into action to uncover the perpetrators of the fraud.

Investors are reported to have put in varying sums into a single wallet in the Bitcoin investment group, BTC Global. The company had promised them weekly returns of 14% of their investments.

A spokesperson for Directorate for Priority Crime Investigation Captain, Lloyd Ramovha confirmed that efforts have been launched calculated moves to track down the masterminds of the crime, as they contravened the Financial Advisory and Intermediary Services Act. It has not been confirmed if the perpetrators of the act are South Africans.

Though very few of the investors made some profit at the initial stage, investigators said thousands of people had lost everything after the scam collapsed in February, in a manner typical of Ponzi scheme. The victims included some who had invested their life savings. In a chat with Times live, some victims have come up to say

Mike Bolhuis, a private investigator who specializes in investigating economic crimes also assured victims of uncovering the masterminds. He further advised people who have fallen victim to this scheme, to open up cases of fraud at the police station, as it will aid investigations. Bolhuis also admitted to feeling the pain of the victims, pledged to do all he can to serve justice to those involved.

This incident supports the argument that the anonymity of users paves the way for fraudsters to infiltrate the system.

Microsoft founder, Bill Gates who had earlier questioned the anonymity clause of Bitcoin, had said that the anonymous feature of Bitcoin will do no good to the government’s ability to tackle money laundering, tax evasion, and terrorist funding.

In a bid to incidents like this, few countries like China and Korea has banned the anonymous trading of Bitcoin, and have ordered companies to verify their traders; policies meant as to give investors some degree of protection.

Solomon Sunny is the market reporter for Smartereum, one of the global leaders in Ethereum, blockchain and currency news. He produces technical price updates on digital currencies and writes recent developments about blockchain.


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