Following its introduction in 2009, Bitcoin’s popularity skyrocketed as its value continued to surge together with technological advancement.
It certainly brought wealth to investors, especially to those who did it right. However, many shared the same demise as their hard-earned money vanished together with their once-trusted investment service provider.
By offering immense promise despite its short tenure in the financial markets, Bitcoin has been a hot spot for those who want to grow their capital passively. However, the disconnect between the knowledge needed and the investors made the latter fall into the pitfall of investing.
BTC Global Scam was one popular case of Bitcoin scam, successfully targeting the desperation and enthusiasm of investors with the lucrative cryptocurrency.
In this TRU Insight, we’ll unravel the development of the notorious BTC Global Scam, walk through its operations, and lay out the company’s painstakingly obvious red flags.
BTC Global Scam in a Glimpse
What happened. In 2021, BTC Global was busted as a crypto investment-facing Ponzi scheme. This allegation followed the findings of the South African National Police, claiming that the company was soliciting investments from the South African public without an actual investment product. In the end, the High Court of Johannesburg ruled against the company, concluding its Ponzi scheme operation.
What do we know. In 2021, the earnings of the members started to slow down. This is followed by various speculations and questions regarding the legitimacy of the platform. Finally, the admin team announced that Steven Twain ran off with their investments, amounting to USD 80.4 million (ZAR 1 billion)
Who are involved. Referred to as the “admin team”, the operators of the BTC Global scam were a bunch of South Africans who were also engaged in various multi-level marketing (MLM) schemes.
Related: What Are Investment Ponzi Scheme: South Africa Financial Terrorists : BTC Global Scam: What Happened to the 1 billion Rand Ponzi Scheme?What Is BTC Global Scam?
Reported by over 27,500 investors, BTC Global was ruled by the Johannesburg High Court as an illegal investment company.
Through its Ponzi scheme operation, the company defrauded a total of USD 80.4 million (around ZAR 1 billion) from thousands of investors.
But how did this Ponzi scheme manage to pull off such a scam?
The formula is simple – they target South Africa, endorsed the success story of its representative, and promised a get-rich-quick investment opportunity.
Promising such too-good (to-be-true) opportunities to citizens of a country with wealth inequality is the perfect recipe for a typical Ponzi scheme. As South Africans are made believe of the opportunities to improve their quality of life, they would take the bait.
The Rise of BTC Global in South Africa
In the late 2017, the South African financial markets witnessed the craze on BTC Global Team.
This scheme became so popular that it ranked among the top 1000 sites visited in the country.
Its popularity made this investment-facing scheme become the largest cryptocurrency scam in the year.
Who is Steven Twain?
Steven Twain is a Taiwanese Bitcoin trader with six years of experience on his sleeve. As per the BTC Global, Twain facilitated all the BTC investments of the members.
Once visited, the BTC Global website was filled with information about Twain.
It’s claimed that his experience as a BTC trader made him a profitable account manager of various high-net-worth individuals.
However, the South African Police Service (SAPS) ultimately concluded that Twain doesn’t exist and was just made to create a fake company representative.
The Guaranteed Return from Cryptocurrency Investment
Though Twain expertise, BTC Global guaranteed all its investors a daily return of 2% from a minimum of USD 1,000 investment. The return can also be scaled the moment the investor referred a new investor into the scheme.
As per the company, an investor can enjoy a 50% monthly investment profit – a minimum of USD 50,000 for the minimum investment!
However, it’s a common truth that the financial markets are extremely dynamic and highly volatile. Thus, no financial instrument can yield anyone a guaranteed return, whether that be the lucrative Bitcoin market.
Remember, no legitimate investment company encourages the public to participate in the financial markets, as doing so carries significant risk.
Is BTC Global Scam Connected to BitCaw Trading Company?
According to the authorities of the South African Police Service, BTC Global was operated by BitCaw Trading Company.
BitCaw Trading Company is owned by Andrew Caw and operated to “help people create wealth”
Andrew Caw went public and cleared his name, saying that BitCaw Trading Company doesn’t have any affiliation with the fraud-accused Bitcoin scam.
Finally, the Directorate for Priority Crime Investigation (or Hawks) confirmed that the Bitcaw Trading Company was indeed the operator of BTC Global.
It was Andrew Caw who owned BTC Global and defrauded thousands of investors – not the non-existent Steven Twain.
The Painstakingly Obvious Red Flags of BTC Global
From its market emergence up until its collapse, BTC Global team exuded numerous red flags – ones that so obvious it’s almost impossible not to spot them.
However, in a country where wealth inequality is apparent, such red flags are overlooked as investors are blindly enthusiastic about securing a better financial future.
Here are the three red flags of BTC Global Team that suggest the Ponzi scheme operation of the company.
Too-Good-To-Be-True Promises
Ponzi scheme operators thrive on the desperation of their target victims.
Desperate to secure a better financial future, their victims would take bait on the promises made by the operator.
In the case of BTC Global, the promise is appealing to the South African public. With a guaranteed 2% profit from a minimum of USD 1,000 investment, unsuspecting investors are presented and lured with a quick and easy way to grow their capital.
Remember, the financial markets, irrespective of their lucrative nature, cannot guarantee a return. Even the most profitable and experienced traders are aware of the market’s complexity and dynamics.
Unfaced Representative
While Steven Twain is plastered across the website, personal information about him remained non-existent.
Such information is necessary to verify the credibility of the representative in the field.
Unregulated Investment Product
In South Africa, all investment products should be regulated according to the Financial Advisory and Intermediary Act (FAIS Act).
According to the national law, being regulated by the Financial Sector Conduct Authority (FSCA) ensures the fairness of the generation, operation, and distribution of financial products. It’s a way to make financial service providers comply to the Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF).
However, the investment product offered by BTC Global to the public is neither licensed nor even acknowledged by the FSCA. This means that the binary product of BTC Global is likely to be non-existent.
The Inevitable Collapse of BTC Global
Just like in any Ponzi scheme operation, BTC Global inevitably collapsed in 2021.
Prior to the collapse, investors noticed a significant decrease in their investment returns. However, the admin team assured the investors that the decrease was due to the slowing Bitcoin market brought about by the crypto winter.
After the slowed-down investment return, the platform became inaccessible to the investors.
The admin team was quick to respond to the matter, claiming that the platform was undergoing server maintenance.
But 24 hours later, the story changed.
The admin team informed BTC Global investors that Steven Twain became busy as his wife gave birth. The admin team ultimately assured the investors that they will be paid accordingly was the system goes live.
A day after, Steven Twain was reported to be inaccessible. In the report from the admin team, several methods were used to connect with the alleged operator but to no avail. BTC Group’s admin team promised to provide more information about the crisis development after a day.
In the said day, the admin team was back to announce their contact with Steven Twain. Allegedly, the operator was attacked by an invader in an attempt to steal his trading equipment.
The admin team promised to resolve the issue and allow investors to access and withdraw their BTC Global funds. However, the platform together with all its communication channels collapsed three days later.
Protect Yourself from the Likes of BTC Global
When done right, crypto investments could be the way to secure your financial security. However, doing it right is easier said than done.
With the lurking and getting-too-sophisticated investment scams, investors are constantly faced with the risk of getting scammed.
To protect yourself from the likes of BTC Global, ensure your connected verified traders and insights. Remember, your network and knowledge are your weapons to combat such scams.
