Bitcoin

This Bitcoin Scam in South Africa is Raking in Over $130,000 Every Day

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By CCN Markets: A cryptocurrency investment scheme in South Africa’s Kwa-Zulu Natal Province has proven that having an unoriginal name, Bitcoin Wallet, never stopped any scam from raking in tens of thousands of dollars daily from the masses.

According to The Citizen, the cryptocurrency scam is operating from Kwa-Zulu Natal’s rural town of Ladysmith. The scam is estimated to be drawing in R2 million ($135,000) daily in a town of just over 60,000 people.

The investment scheme owned and operated by Sphelele ‘Sgumza’ Mbatha is promising returns of 100 percent within 15 working days. Initially, the lowest investment amount allowed was R100 ($6.74). However, it has grown so popular that no amounts below R5,000 ($337) are being accepted. And due to its immense popularity, long queues are forming at its offices. Some ‘investors’ are even being forced to begin queuing as early as 3 AM.

So How Is Bitcoin Wallet Making Money?

Per The Citizen, Sgumza had indicated in an interview with a community radio station that he was generating profits for his investors by buying and selling Bitcoin. He only charges a 10 percent administration fee.

While trading Bitcoin is certainly profitable for some, guaranteed returns of 100 percent every three weeks are unheard of. Besides, cryptocurrency prices do not move in just one direction but can reverse thereby exposing trend traders to losses.

Additionally, there isn’t an instance when Bitcoin went up by over 100 percent in a three-week period. The closest it came to this was gaining 56 percent between May 1 and May 14. Since the 2018 low of around $3,200, Bitcoin has appreciated by over 160 percent.

Bitcoin price in the last six months | Source: TradingView

So What Else Is Suspicious about the Investment Scheme?

Reports further indicate that Sgumza has turned into a local celebrity driving around in expensive cars and a police escort. He is also said to throw lavish parties and dishing out cash amounts indiscriminately.

But when contacted by an African News Agency reporter, Sgumza declined indicating that he would have to be paid to sit for one:

I actually don’t have a problem with giving you the interview, but how much are you going to pay me? If you are not going to pay me anything, then there is no interview. Call me when you have decided how much you are going to pay me.

No, We Have Nothing to Do with Bitcoin Wallet

Some businesses located near Bitcoin Wallet’s offices in Ladysmith have also distanced themselves from the investment scheme. This is out of fear that they might be mistakenly associated with the operation. Some of these businesses include shops operating in the vicinity.

While Bitcoin Wallet purports to be registered by various South African regulators, some of the documents appear to have been forged. Additionally, the investment scheme appears to be overcompensating by displaying documents at its offices from non-relevant regulators.

For instance, Bitcoin Wallet displays a certificate from South Africa’s credit industry regulator, the National Credit Regulator. The NCR does not regulate investment schemes.

Bitcoin Wallet’s forged certificate | Source: iol.co.za

Additionally, Bitcoin Wallet didn’t even bother to use the proper NCR font. They also seem to have forgotten to change identifying information from the documents they used as a template.




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Bitpoint Hack Shows That Regulators’ Scrutiny Does Not Equal Safety

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On July 12, 2019, Tokyo-headquartered cryptocurrency exchange Bitpoint promptly suspended its services after noticing an error in the outgoing funds transfer system. Soon, an official announcement followed, revealing that the trading platform had lost around 3.5 billion yen (roughly $32 million) as a result of a security breach. The exchange’s administration has managed to find a portion of the missing funds since the initial announcement was published. Nevertheless, the security breach seems to continue the streak of hacks targeting Japan-based exchanges.

Details of the hack

According to the breakdown of the hack published by Bitpoint’s parent firm, Remixpoint Inc., Bitcoin (BTC) accounted for the highest share of total losses. The total amount of stolen BTC (1,225) is worth over 15 billion yen (just over $138 million). Further, over 28 million XRP (10 billion yen, or $92 million) and 11,169 ETH (3.3 billion yen, or $30 million were…



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Facebook Stresses Libra’s Compliance With FinCEN at Senate Hearing

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David Marcus, head of Facebook’s crypto wallet Calibra, stressed Facebook’s intent to be compliant with the United States Financial Crimes Enforcement Network (FinCEN) in distributing the Libra stablecoin. As a Cointelegraph correspondent reports on July 16, Marcus delivered his comments at the ongoing hearing on Facebook’s Libra with the Banking Committee of the U.S. Senate.

Addressing the issues of money laundering and terrorism financing, Senator Cortez Mastro asked Marcus how Facebook is going to ensure that the platform is not being used for such purposes. Marcus responded that “this is something that I care about deeply, personally.” Marcus added that the company will have an Anti-Money Laundering program, reiterating Facebook’s commitment to FinCEN.

Marcus stated that “Calibra will be affordable and accessible and also safe and secure” and will comply with FinCEN and state regulation. According to Marcus, Libra Corporation will still register with FinCEN despite the…



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R3 to Support a Startup-Focused Stock Exchange in Brazil

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Blockchain consortium R3 has partnered with Brazilian fintech company Banco Maré to launch a stock exchange for investing in technology firms.

Banco Maré, a blockchain-powered digital bank focused on financial inclusion, intends to build a tokenized stock exchange offering investments in technology companies with “social impact,” Cointelegraph Brazil reports July 16.

The new R3 technology-backed platform, provisionally named BVM12, will purportedly open a new funding source for technology startups, as well as enable individual investors to generate dividends from investments in new technologies, the report notes.

Rio de Janeiro-based Banco Maré has reportedly conducted its first informal consultations with the Brazilian Securities and Exchange Commission, and is reportedly planning to make an official request to the agency in August 2019.

Banco Maré CEO Alexander Albuquerque claimed that the new venture aims to democratize risky investment and bring the low-income public to the stock market.

Earlier in June, Cointelegraph reported that the…



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‘I like bitcoin,’ says House GOP leader McCarthy, hits Facebook Libra

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House Minority Leader Kevin McCarthy told CNBC on Tuesday that he likes the decentralized nature and the security of bitcoin.

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