It appears that the money of hundreds of people who invested their money with Bitcoin Wallets has gone up in smoke. This comes after about 200 angry residents, last Tuesday, set fire to the Tsakane, Steadville home of the master mind of the Ponzy scheme who promised a 100 percent return within 15 days. Bitcoin Wallet investors demanded their money back and answers.

The night before, about 600 investors converged outside the Ladysmith police station, baying for the arrest of the man behind the scheme, who is believed to have raked in millions of rands from gullible residents. “He took all my money. How am I supposed to live and see to my children this month,” said one angry investor while waiting for the Bitcoin Wallet man outside his home. The resident invested two months of his salary, skipping his monthly debit orders, hoping to get double his money back.

“The money I was supposed to make was going to help me catch up and then have so much extra over, but I have nothing now,” he said.

On Tuesday, Public Safety, fire- fighters, and public order policing were on the scene. Residents shouted at officials demanding justice as they said that they had lost everything. The Bitcoin Wallet man’s home and luxury vehicle was destroyed in the blaze. It was utter chaos on Settlers Drive, at the Ladysmith police station, as people demanded from the police to see the owner, staff or management of the so-called investment company. Settlers Dr and part of Murchison Street was completely blocked by parked cars of those people seeking answers at the police station.

Investors included public servants, teachers, domestic workers and the general public who have now allegedly lost their hard earned income.

Last week, Bitcoin Wallets announced that they would be closing their offices on Midblock Road and would now only be trading online. Their doors were kept open 24 hours, seven days a week as people flooded to the offices to make investments.

The exact amount of money raked in by Bitcoin Wallets has not been established. While hundreds demanded answers, there were others who claimed to have received a return on their investment.

Since Bitcoin Wallets closed its doors, the Alfred Duma Local Municipality has distanced itself from saying that they did not call for the closing of its offices, as previously believed. “They were told to find offices elsewhere. The municipal by-laws in the CBD area was not being adhered to by those that were coming into town to invest,” said the municipality in a statement.

Last week, investors received an SMS and social media alerts saying that Bitcoin Wallets was “working hard” to develop its business and was due to be re-launched online on 6 July. Since then, people claimed that their investments were not paid in and money was missing from their bank accounts. In a radio interview with Sphelele “Sgumza” Mbatha, the alleged manager of Bitcoin Wallets, he claimed that the company’s online account was hacked. He apparently informed people that he was “currently not in town”.

While events unfolded, it is believed that employees of Bitcoin Wallets had to call for police assistance as they were being threatened by people from the Ezakheni community. As police advised them to go to the police station, they arrived there at 8pm on Tuesday evening, refusing to leave as they feared for their lives.

In another report, Mbatha claimed that there was no money to pay back investors and that he was not sure what to do next. The National Treasury, the South African Reserve Bank, the Financial Services Board, the South African Revenue Service and the Financial Intelligence Centre, have all warned members of the public to be aware of the risks associated with the use of virtual currencies for either transactions or investments.

Currently in South Africa, there are no specific laws or regulations that address the use of virtual currencies, and thus no legal protection or recourse is afforded to users of virtual currencies. “Due to their unregulated status, virtual currencies cannot be classified as a legal tender as any merchant may refuse them as a payment instrument without being in breach of the law,” National Treasury has said.

“Because virtual currencies are not regulated, users are not protected and are at the risk of losing money. Transactions are also irreversible. We advise users to exercise extreme caution when participating in virtual currency transactions.”

No arrests have been made and no cases were opened at the Ladysmith Police station at the time of going to press.