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Alleged South African Crypto Scam Company Files for Bankruptcy

South Africa Bitcoin

While cryptocurrency scammers are running rampant across the world, law enforcement agencies are also showing more progress with catching some. In South Africa, authorities have cracked down on an alleged scam crypto investment company. He will now be answering queries from them and his investors.

The End of the Road for VaultAge

Recently, News 24 confirmed that police had found some items belonging to Willie Breedt, the head of VaultAge Solutions, after a raid. Breedt founded VaultAge in 2018, promising returns on customer deposits through crypto mining and trading. The company accepted deposits from about $50, although investors have claimed that they only got 1 percent of the returns that the company promised them.

Investors soon became antsy, and they tracked Breedt down to a guest house in Pretoria. He had booked accommodations there using a fake name. However, they didn’t find him. Shortly after, the South African Department of Home Affairs claimed that he had fled the country and was in Mozambique.

After he fled the country, Breedt had reportedly cut communications with the company and its investors. However, a separate News 24 report confirmed that he had sent a mail assuring investors that their funds were safe. Per the report, he claimed that they would begin receiving interest payments from May 30. 

The promise was a dud, and no investor got their pay. Earlier this month, investors confirmed that they would file an urgent application with the Port Elizabeth High Court.

“We aim to have the application where we will seek relief from the court, before the High Court at the end of the week,” said Annette Veldsman, one of the company’s 2000-plus investors 

Earlier this week, Simon Dix — one of VaultAge’s largest investors, who invested 7.5 million South African rand (about $440,000), issued a sequestration order against Breedt. Shortly after the order got granted, South Africa’s Directorate for Priority Crime Investigation, known as “the Hawks,” raised the Pretoria-based guest house.

A Bad Look For the Industry

The raid yielded some meaningful results, with law enforcement finding a laptop and a Ledger Nano crypto wallet that could contain some of the investors’ funds. News 24’s latest report confirmed that Breedt was still at large. The South African Reserve Bank has also reportedly assigned leading auditing firm PricewaterhouseCoopers to investigate the company and all the agents who might have conducted transactions on its behalf.

Apart from his whereabouts, the Hawks have also been investigating a separate criminal case which claims that Breedt forged legal documents and proofs of payment. As part of the investigations, the law enforcement agency confirmed that the CEO had emptied his bank account, which initially contained about $13.5 million.

The news of this scam won’t particularly sit well with regulators, especially at a delicate period for South Africa’s crypto market. Last December, local business-focused news source Business Report pointed out that the South African Reserve Bank was working towards developing crypto legislations. While the report didn’t give a date for the presentation of the new rules, the fact that such a scam could operate freely in the country can’t be a great sign.

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