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.

Bitcoin Drops Below $10K After a 7.5% Flash Crash

Siamak Masnavi

According to data from CryptoCompare, around 21:00 UTC on Wednesday (February 19), Bitcoin suffered a 7.5% flash crash, dropping almost $800 in just 45 minutes, as you can see in the 24-hour BTC-USD price chart shown below:

BTC-USD 24 Hour Chart on 20 Feb 2020.png

At 21:00 UTC on Wednesday, Bitcoin was trading at $10,146, and by 21:45 UTC, it had dropped to its intraday low of $9,379, i.e. a loss of $767 in value in less than one hour.

As usual, when Bitcoin fell, the vast majority of altcoins fell also, some (e.g. EOS) suffering an even harder fall.

At press time (around 07:20 UTC on February 20), Bitcoin has recovered somewhat to $9,625. This means that currently Bitcoin's market cap is $175 billion, and Bitcoin Dominance stands at 62.75%. 

Bitcoin's return-on-investment (ROI) figures (against USD) for the past 7-day period, past 30-day period, year-to-date (YTD) period, and  past one-year period are -6.1%, +10.10%, +33.28, and  +139.88% respectively.

The Crypto Fear & Greed Index, which "provides an easy overview of the current sentiment of the Bitcoin / crypto market at a glance", currently has the value 44 (i.e. in the "Fear" territory):

Fear & Greed Index on 20 Feb 2020.png

Popular macroeconomist and crypto/trader Alex Krüger took this opportunity to remind traders not to speculate with Bitcoin on high leverage:

As for Josh Rager, another prominent crypto analyst/trader, he offered this bit of technical analysis:

With regard to market volatility, crypto exchange Kraken's recently-released report "January 2020 Volatility Report" made a number of interesting observations, but the key takeaway was:

Shifts in sentiment and open interest in Jan. indicate greater volatility in the coming weeks or months.

Finally, on the topic of Bitcoin's next block mining reward halving in May 2020, Binance Co-Founder and CEO Changpeng Zhao (aka "CZ"), expressed the following opinion during an interview yesterday with BLOCKTV Senior Anchor Yael Lavy:

I personally believe the halving has not been priced in.


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