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 Price Crosses $4,000 for First Time in Six Weeks

Avi Rosten

Bitcoin (BTC) today extended its mini-bull run, crossing the significant $4,000 mark for the first time since January 9, according to data from CryptoCompare.

bitcoin price

Beginning on Sunday evening (February 17), there has been a market-wide rally, with top altcoins including ETH, XRP and EOS experiencing significant price surges.

With over $15bn added to the total crypto market cap since Sunday, this latest milestone comes amid expectations that bitcoin could record its first monthly green candle for over 6 months.

Cryptocurrency trader Josh Rager argued recently that if BTC manages to stay above $3,413 for the rest of the month, we would see a green candle for February:

Even Litecoin (LTC), which was noticeably absent during yesterday’s initial gains - cooling after impressive an impressive 45% price rise on 8 Feb. - has joined in the rally, climbing over 7% in USD value.

litecoin price

Overall volume across cryptoasset exchanges is almost double what it was during 8 Feb., which marked the first day of the current broad market uptrend. eToro report that a total of $27 billion was traded yesterday versus roughly $14 billion on 8 Feb.