South Africa Investigates $80 Million Bitcoin Ponzi Scheme That Collapsed After Its Founder Disappeared

  • South African authorities are currently looking into an alleged bitocin Ponzi scheme that swindled investors out of $80 million.
  • The scheme's founder reportedly disappeared, alhtough some believe he never existed in the first place.

South African authorities are reportedly investigating an alleged bitcoin Ponzi scheme that fell apart after its founder, dubbed Steven Twain, mysteriously disappeared. According to Reuters, the scam defrauded investors out of 1 billion rand ($80 million) after promising them huge returns that never materialized.

The Ponzi scheme was reportedly being run by a company named BTC Global, which grabbed investors by promising them returns of 2 percent per day, 14 percent a week, and as much as 50 percent per month. At press time, the company’s services have been suspended.

Through a statement, South Africa’s police stated:

“Members of the public are believed to have been targeted as part of the scam and encouraged by agents of BTC Global. Some of the investors got paid in terms of the agreement. However, the payments suddenly stopped.”

South African police

​​​​​​​According to news source Fin24, various victims banded together on social media, and now some believe Twain was an alias and not a real person, although there are several blogs that claim he was indeed a real person. A blog owner named Cheri Ward has revealed she met Twain on “messenger and email,” but never in person. Ward was quoted as saying:

“I pushed him for a live video and asked him to address us all on Skype. He was dead set against it. I knew that if I pushed harder he would pull away. As a leadership we decided that we would let him have his peace, he had after all been making payments on time every Monday to hundreds of people without any trouble.”

Cheri Ward

​​​​​​​BTC Global’s website, at press time, claims that the “admin team cannot locate him,” and asks for those with information to step forward. It adds that the team behind the alleged scheme is “as shocked and angry as everyone,” while adding that everyone “knew the risks involved in placing funds with Steven.”

Per police investigator Yolisa Matakata, the $80 million investors were reportedly swindled out of may just be the tip of the iceberg, as there are “potentially thousands more yet to discover they’ve lost money.”

This case follows one in which South African police detained three in a kidnapping case, in which the criminals demanded a 15 BTC ransom (worth about $120,000) to release a teenage boy.

Last month South African authorities revealed they expected taxpayers to declare their cryptocurrency gains, although the central bank was still in the process of discovering whether these comply with its financial surveillance regulations.

New Browser Extension Lets Lightning Network Users Shop on Amazon With Bitcoin

A new browser extension called ‘Moon’ allows Bitcoin’s Lightning Network (LN) users to buy products on Amazon and various other e-commerce websites using BTC, although the websites themselves don’t handle any crypto.

According to CoinDesk, the extension was launched by a crypto payment processing startup with the same name, that had about 250 beta users before adding its LN feature. Users are able to use the extension to spend crypto on e-commerce websites, either by connecting it to exchange accounts, or through the LN.

Speaking to the news outlet the company’s CEO Ken Kruger stated:

[The extension] will pop up a QR code and it will have the lightning invoice, which you could also copy and paste if you can’t use the QR code for some reason, and you’ll be able to pay with your favorite lightning wallet.

While Amazon and the other e-commerce websites won’t be handling any crypto, traditional financial institutions help convert the BTC to fiat, so Amazon’s merchants receive fiat currency for the purchases.

By 2020, Kruger claims Moon will allow users to spend BTC on “almost any e-commerce site.” Per his words, there’s no direct merchant integration, and the startup “also manages payment channels and merely offers a simple interface for sending payments.”

Currently, however, the feature isn’t yet live as the Moon browser extension is still being review by the Chrome Web Store. It’s expected to launch tomorrow (April 24, 2019). Currently, the flagship cryptocurrency’s Lightning Network has several interesting use cases, which include buying from vending machines, ordering food online, and playing games like chess.

Kruger added Moon is integrating with the Visa and Mastercard networks, as it gets a “cut of the interchange fees that merchants pay every time they receive a credit card transaction.” The startup managing the crypto payments has received a $100,000 investment from the Entrepreneurs Roundtable Accelerator before adding the LN feature.

Per the CEO his startup is looking to raise a Series A this year, while it keeps on learning from its users’ behavior.