South Africa $16M digital currency scam founder declares bankruptcy

Over 2,000 investors in a digital currency scam in South Africa are set to lose their money after a local court declared the founder and CEO bankrupt. Willie Breedt, the founder of VaultAge Solutions, has been in hiding for months after allegedly orchestrating a $16 million digital currency investment scam.

Last week, one of the biggest investors in VaultAge successfully applied for a sequestration order against Breedt in a local court, News24 reports. The investor, Simon Dix, claims to have lost R7.5 million ($440,000) to the scam.

Breedt has been in hiding since January, according to the report. However, two weeks ago, some of the aggrieved investors managed to track down his house. In fear, he went into a guesthouse in Jeffrey’s Bay, a town in the Eastern Cape province. The investors were still able to track him down, even though he had booked into the guesthouse under a friend’s name.

The investors were joined by the local police and South Africa’s organized crime investigations department, popularly known as The Hawks. Together, they raided Breedt’s house, seizing his laptop and a Ledger Nano hardware wallet. The authorities have yet to reveal if the wallet contained the money he defrauded the investors.

A South African court had earlier granted the investors an order to freeze two of his bank accounts, but Breedt has not been arrested.

In May, multiple reports had indicated that Breedt had fled South Africa and was hiding in the neighboring Mozambique. South Africa’s Department of Home Affairs had provided documents that showed he had fled to Mozambique in December 2019. However, it turns out he has been in hiding in South Africa ever since his scam blew up.

Breedt lured at least 2,000 investors into his scam by promising lucrative monthly returns. He claimed that he was investing the money in digital currencies. However, as the investors later came to discover, it was all a lie. VaultAge Solutions wasn’t a registered entity and their investment never went towards digital currency investment.

South Africa has seen a rising number of digital currency scams in recent years. The scammers take advantage of the rising popularity of digital currencies to sell their scams, promising overnight riches. In 2019, a BTC Ponzi scheme known as Bitcoin Wallet went down, admitting that it had lost all the investors’ funds. Before it sank, the company had reportedly been raising over $140,000 a day in deposits.