Get-rich-quick scheme pulls a crowd, despite regulators calling time-out

Interest in Mirror Trading International seems undiminished, in spite of three strikes from three different regulators.
MTI marketing whizz Cheri Marks and her husband were involved in BTC Global, which went down in a ball of flames in 2018 after the Hawks reported that R854m had been lost in the scam. Image: Luke MacGregor, Bloomberg

Mirror Trading International’s (MTI’s) promise of 10% monthly returns started getting the attention of crypto traders back in January. For seasoned traders, these claims failed the ‘smell test’, and they started talking about it online on IT news website MyBroadband.

Then two months ago Brandon Topham of the Financial Services Conduct Authority (FSCA) started looking into suspect claims being made on WhatsApp chat groups about the company’s incredible returns.

Read: FSCA investigating Mirror Trading International

As Moneyweb reported last week, the FSCA is investigating MTI and has urged the company’s clients to request their funds back as soon as possible.

That’s pretty blunt advice from the normally circumspect FSCA.

In July, the Texas Securities and Exchange Commission (SEC) issued MTI with a cease and desist order on the basis that its claims were materially misleading. The Quebec Financial Market Authority has also listed MTI as a company that solicits investors illegally.

Happy customers …

The company has reportedly signed up more than 130 000 customers around the world, and its defenders – and there are plenty of them – argue that no one has lost any money with MTI.

The following interaction on MyBroadband is commonplace:

“Anybody who is unhappy can withdraw all their funds immediately and leave, nobody is holding you back! This continued attack is just a reflection of a justifiable Fear Of Missing Out (FOMO)? You are showing your jealousy!” says Bruce, an apparently happy MTI client.

Replies Stevie: “Do you really believe that what you seeing on your [MTI trading] dashboard is as a result of a real trade, that like the vast majority of them somehow managed to beat every statistical law and probability, and have a positive return?”

The words ‘Ponzi scheme’ come up frequently.

One critic was reportedly served a cease and resist letter by an attorney representing MTI. It’s getting ugly.

Astonishingly, MTI has reportedly pulled in close to R3 billion from investors, using multi-marketing teams who are rewarded with 10% commissions on new sign-ups. It also claims that the 10% commissions are paid out of profits rather than the investors’ capital.

“Empower Thyself financially with the spiritual currency of bitcoin and ensure your future by investing your bitcoin and earning 10% compound interest per month,” says the company’s Facebook page.

Promised returns

Is it possible to make 10% a month with bitcoin?

“Absolutely,” says one trader who asks not to be named. “It’s even happened in a single day that bitcoin has gone up 10%. But when you promise to do that month after month, then it starts to look like [a lie].”

Read: Joining MTI may end in tears

Just prior to the FSCA warning, MTI claimed on its Facebook page to be a legitimate trading company that had been achieving an average 0.5% compounded growth per day, five days a week. But as traders have pointed out, this is virtually impossible.

The same Facebook page goes on to say that it trades with the “monetary value” of bitcoin, not with the actual bitcoin itself. The bitcoin apparently never goes into the trading company “as it is stored in a Triple A-rated insurance company in a cold storage facility in Europe”.

Cold storage in the crypto sphere means the bitcoin is stored on an electronic device not connected to the internet, and is therefore immune from hacking.

‘Profit machine’ powering ahead

Recent adverse publicity appears to have done little to dent enthusiasm for MTI. A recent live MTI webinar capped out at 1 000 attendees, with the host reassuring members that it was fully compliant with the laws in SA, and that the profit machine was powering ahead.

Experienced traders have called rubbish on the claim that out of 200 trading days, only one day was losing. Evidence of this win-lose ratio is rather thin.

MTI supposedly has about 14 000 bitcoin under its control, which would make it one of the top 60 or 70 crypto players in the world – sufficient to move prices should it throw a decent percentage of that firepower at the market.

The company has urged investors to send their bitcoin over so they can start trading an equivalent amount on the forex market. MTI says it uses a proprietary “bot” and artificial intelligence to trigger buy and sells, and trades both cryptos and forex.

Not licensed

You have to be licensed by the FSCA if you’re trading in forex, and MTI has just been stopped from doing that.

Its Belize-based broker FXChoice also recently froze its accounts on the basis that its hyped-up marketing claims are hard to believe. Read its statement here.

Crypto trading falls outside the jurisdiction of the FSCA, though legal amendments currently in the works will bring crypto intermediaries and financial advisors under its watch.

In response to the FSCA statement last week, MTI says it’s complying with the regulator. Topham says this is partially true. “Yes, they are cooperating to an extent, but we want to have sight of where the money is sitting, and that we don’t have yet.”

Moneyweb understands MTI has shifted its trading account to another broker based in St Kitts in the Caribbean.

In response to the FSCA statement, MTI posted the following notice, alerting investors that while it would cease trading forex, MTI’s crypto bot would be fired up on Friday last week (August 21):

“During this break from forex trading, MTI will continue to seek a trading licence so as to be as compliant as possible. Once this has been achieved, MTI will retake our position in the forex space. We anticipate that this will take no longer than four weeks, after which we will then be adding the forex trading as an additional bot for members to benefit from, actively then trading forex and cryptos. The purpose of this change is to offer more to our members and to ensure that MTI continues to help you grow your bitcoin!”

Timeline curiosity

MTI’s marketing whizz Cheri Marks posted trading results for August 20 on Facebook, claiming a 1.73% return for the day – despite MTI telling clients it would cease forex trading days earlier, and a day before the crypto bot was due to start operating.

“How is this even possible?” asks one trader. “By their own statements, they were not trading forex, and had yet to start trading cryptos.”

Marks (née Cheri Ward) and her now-husband Clynton were involved in BTC Global, which went down in a ball of flames in 2018 after the Hawks reported that $50 million (R854 million) had been lost in the scam (when its alleged founding trader Steven Twain disappeared), where investors were offered 14% weekly returns. However, it’s suspected that Twain was a fabricated person used as a scapegoat for the scheme’s collapse.

In a recent MTI presentation, US-based member Joel Santiago said MTI was 100% compliant with regulations in SA. “We execute anywhere from 400 to 800 trades per day, the system does, half of those are losing, half of them are winning.”

Presumably, then, the daily wins are sufficiently large to overwhelm the 50% losses that Santiago claims.

He adds that trading profits are allocated 40% to members, 10% to MTI, and the rest spread between “binary commissions”, leadership fees and traders’ fees.

Over the 11 months to June 2020, the company claims to have generated a 166% profit for members, or an average daily profit of 0.49%.

Playing on fears … 

The FSCA’s Topham says the company appears to have received a surge in inflows as a result of the Covid-19 lockdown, from people understandably concerned about their future source of income.

“Unfortunately, at times like these, some people make misguided investment decisions in the hope of making a killing, and I think this is one of those occasions.”

Bitcoin was conceived more than a decade ago as a kind of financial rebellion against reckless government money printing, and MTI plays on very real fears that governments have lost the plot and will try to print their way out of chaos.

In the last five years, however, the crypto community has worked with regulators around the world to bring a sense of order to what was seen as the financial Wild West.

Smelling off

Crypto and forex brokers are extremely sensitive to the vapours of scandal.

Broker FXChoice explained the reason for blocking MTI’s trading account.

Its statement makes it clear that MTI executed few trades prior to May 2020, and what trades it did execute before the account was blocked were “performed manually, large and incurred substantial losses”.

This starts to smell even worse. “We want to make it clear that the information naming FXChoice as the broker where MTI executes its forex operations is inaccurate,” FXChoice states. “The same can be said about their claims of using artificial intelligence software.”

The following is an extract from its statement:

MTI opened an account declaring that all the funds they were going to trade were their own.

Due to large deposits, and the fact that FXChoice was mentioned in their marketing videos, we had to take a closer look at MTI.

MTI opened a personal account profile in 2017 under the name of its current CEO, but we didn’t notice any suspicious activity with the trading volume and the deposits were small.

Their activity picked up in May 2020; by this time, the account had been converted to corporate status. This was when the deposits and trades were made.

Our research leads to the realisation that MTI is a multi-level marketing pool that claims high returns from trading forex for their members using artificial intelligence software.

Additionally, MTI uses a very aggressive multi-level marketing campaign with high rewards to get new investors into the pool.

Due to this new information, we blocked MTI’s account on 10th June.

In a July 2020 report published on Globalcrypto, MTI CEO Johann Steynberg refutes allegations that MTI is a Ponzi scheme, says referral fees are paid out of trading profits and not investors’ capital, and that not a single MTI member has complained or not been able to withdraw their bitcoin when they requested.

Steynberg concludes: “The time has come to, for once and for all, address and reframe the reputational perception issues of regulators, the media and potential members about this industry, through MTI demonstrating that a genuine bona fide business and brand using an innovative business model of integrity can exist and grow sustainably in this sector. I am personally very determined to see this through and together with and supported by MTI’s professional advisors, this process is now underway.”

Read: The FSCA’s Gerhard van Deventer, MTI spokesperson Cheri Marks and Galileo Capital’s Theo Vorster share their standpoints on Mirror Trading International here.

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What is calling “time out”? Why did the “regulator” not close them down? I am talking here about the SA regulator. The FSCA.

I think the FSCA “regulator” is not qualified to make a decision as he does not understand what is going on.

If something is wrong CLOSE THEM. Else the regulator need to just keep quiet.

Agree, if one want to trade, you have to prove to regulator it is ligitimate, not the regulator having to prove your operation are illegitimate. Shut them down until you are sufficiently satisfied they have complied with any and all regulations. Don’t pull a Cyril on us, grow some balls for heavens sake

Only invest in crypto with money you can afford to loose. Lol

Except this isn’t crypto, it has the attributes of a scam that pretends to trade in forex and crypto. It could be tulips, sub-prime property or bunny rabbits, doesn’t really matter. Pyramid scam remains a pyramid scam regardless of the buzzwords used.

I am leaning towards a hands-off approach here. If the “investors” fail to ask very basic questions, such as how such profits are possible, then they, as adults, have the right to make fools of themselves and to lose all their money.

That attitude unfortunately doesn’t work in civilised society. It is like saying the strong may rob the weak – after all, they are strong.

If you have money to invest, you are not a vulnerable part of society. It’s called freedom of choice.

A fool and his money….

are easily parted, but it cost a pyramid scheme to get it started!!

ciaran-ryan. Not bad for a smeer campaign. Sadly you had to go and pull support from the “my broadband” website. These people have even less knowledge than you do.
You went on the internet and searched for support. From regular people.

To you you Sir. Did you tell the truth, the whole truth?
Alot of time has been spend on this slandering article. Yes, completely biased. And supporting the status quo.
When the bad times come in a few years. Would you still stand by this article? No shame?

As in all sport you have your supporters which is also the sport defenders.
As a member of MTI I am also the defender. Its a natural conclusion. Why you have to go into detail for a negative spin on anything you can muster is astounding.

3 billion has been invested into MTI. Its been talked about. Still you miss it. Would a onzi not have taken the money and ran a long time ago?
Why are MTI still trading with all that money?
Trading yes. Because all the trades can be verified by each person.

This article author ciaran-ryan will do anything to convince the gullable, miss- and un-informed that is not so.
How is it even possible for you and your people not to find proof? There was a time when people got fined for staring smeer campaigns and attempting to close down a business without just cause. We clearly not the case here. A clever spin on everything reported by you is tainted. In ten years time your sorry won’t be good enough. People could have broken free from all sorts of financial problems. Why should the rich care right?

The FSCA has no jurisdiction over the unregulated crypto market and therefore their opinion is irrelevant. The crypto market is a major threat to the traditional banking industry of which the FSCB is their controller and major benefactor. It is therefore only natural for the FSCA to protect their own and keep the masses away from the highly rewarding crypto environment. Naturally there is risk involved in any industry but to keep the people away from real money generating opportunities is naive and not in the best interest of the general population.

Yes it’s all a conspiracy by the banks and the regulator. They don’t want people to get rich.

I know this, because a black helicopter landed on my lawn, the Easter Bunny got out – wearing a tinfoil hat of course – and told me this in person.

Strange how big business is adopting cryto as an alternative must be a reason they taking there money out of banks

R3 billion, wow! When one is financially illiterate, these schemes and other ligitimate investments all read the same unfortunately. Those who losing money are those who can least afford it

Tulip mania is alive and well!

If that remarkable trading bot is so great, why would MTI not trademark it & SELL it for a few billion US$ to the highest bidder on the international trading sphere??

…heck, they’ll fall over their feet to own such a phenomenal bot!!

But they need YOUR money to make YOU successful 😉

(….and google where Johann Steynberg, or Cheri Mark (néé Ward) were previously involved in. Critical reviews all over web. Maybe I’m wrong & they became converted Christians…who knows).

There likely exist NO trading bot. Just impressive demo software members are playing on (thinking its for real)! You DO NOT NEED a ‘bot’….as crypto money passed from Peter to Paul (or from Sipho to Vusi to sound ‘inclusive’), or from Susan to Mary (to sound gender correct).

When they spend elaborate time in their vids reiterating to people it’s not a pyramid, it usually is. (I’ve never experienced that my own bank, or asset manager or ins company had to motivate themselves that they’re not a pyramid 😉

The trading bot is for real Michael. The thing spits out money. You feed it bull at the one end, and the money comes out the other end. The trading bot they refer to is the investor actually. They feed this investor a lot of nonsensical disinformation, the investor regurgitates it for a while and then produces money for the scheme. You see, the bot is for real.

Your bank and the financial system you have been programmed to live in is the biggest Ponzi scheme in history… Crypto has given me richest that the “normal” system steals via inflationand money printing systems driven by monetary policies…

@MM. Well, IF the traditional bank etc is a Ponzi, why don’t you ask your bank manager to give you reduced fees when you refer people to them. Or check with your bank what “tier” you are in, and how many people to need to recruit for your bank to move yo to higher tier.

Funny, then people also misinterpret the MLM by saying normal retail businesses (like grocery stores) are also like a MLM. Strange then, Checkers or PnP never offered to pay me money back, or reduce my grocery bill based on the number of shoppers I recruited for the store. Maybe I should check?

Yeah right. Let me tell you, the whole Motor manuf & sales industry is a pyramid…as they have “conditioned” us what we should pay for a new car. And the whole medical practitioner & hospital service provider set-up must be a scam since oans ago, scamming the ill & frail out of their last pension income.

The cosmetics industry is a ponzi…you don’t want to know their trade secrets. The IT industry was created to scam the less tech savvy out of their money…was the plan all along.

Take the Legal industry scam for example: it was initiated to provide kids at school, which can’t do anything with their hands, who excelled at debate…to provide them an adult career, so they can earn a living.

Us accountants….yeah, we were also the kids at school that could not do wood and metal work, so we created numbers “alchemy” to give us kids hope to earn a scamming life. We steal from the less-financially apt in society.

I see your point, banks must a ponzi.

Your bank and the financial system you have been programmed to live in is the biggest Ponzi scheme in history… Crypto has given me richest that the “normal” system steals via inflationand money printing systems driven by monetary policies…

Dear Michael

“Maybe I’m wrong & they became converted Christians…”

As an alumini of the University of Hard Knocks and a businessman with 50 years of real life experience this is amusing. I learn’t early in my business life to be very wary when someone ‘slipped’ the info that they are Christian. It immediately raises a red flag with me – and every other business person I know. Also, it is interesting how Christians are often the people who get sucked into these too good to be true schemes.
One of my best friends has done exceptionally well using his salary and savvy to amass an impressive investment portfolio. He and his wife are strictly religious. Some weeks ago he sent me the blurb on MTI. As soon as I saw ‘recruiting new members’ I recognised the rat. I phoned him and warned him. He said I was unreasonably skeptical. I told him not to get involved but if he did for ……. sake keep it small and keep pulling your profits out. A week later he enrolled me and deposited R200 “to open my account”. I emailed him the report of the Texas regulators who banned MTI. He wrote back and said he had made R90k ‘last week’! I phoned him again and asked how much he had invested to make R90k in one week? R500k he replied!!! I told him he needs to see a psychiatrist. He again tried to convince me I am being unreasonably skeptical. I did a lot of research and wrote him a very detailed report of the background of the people involved and the reasons why this must be a scam. I sent him the recent warning from the FSCA. Yesterday I phoned to invite him and his wife to my birthday lunch. He told me he now has over R700k in the pot! They are just as adamant about their religion.
People believe what they want to believe, regardless of the facts, logic or common sense. I ask with tears in my eyes, is there a certain mindset that predisposes people to implicitly believe in the phantasmagorical?
(I am not an atheist or agnostic or whatever other label, I simply do not believe anything that man has created, which are the religions and their books. IMHO fake news started with Adam and Eve.)

Some religious people think that stuff exist because they believe it does. For them, their mental makeup is able to create whatever they want reality to be. When they decide to believe in an idea, then nobody will be able to convince them otherwise. If you are able to talk sense into them, they fear that they will also, for the same reason, lose their reason to rely on religious beliefs.

For some, religion is an abdication of accountability and responsibility. They rely on a higher power so they don’t have to rely on their own judgement, because they lack clarity.

Those who have found clarity do not need to believe, because they know with certainty.

Highly unlikely. Someone is talking g BS

Far more money has been hacked, stolen or generally scammed under various crypto schemes than the value of actual goods, services paid for with crypto. A sampling in 2017 price values:

OneCoin took over $5b from 3m investors
BitConnect $3b from 1.5m
PlusToken $3b from 100k
Bitcoin Savings & Trust $5b from 10k
Pincoin and iFan (Modern Tech) $660m

Modern Tech very similar to this one : 8% referrals, 48% returns per quarter, etc

For those that are in: old advice : cash out to real money what you put in plus a bit for XMas and gamble with the rest.

This country has had feckless regulators for the last 24 years. The FSCA has real teeth and I congratulate them!!!!!! Keep doin what your doin!!

can they pls take us how they getting back ppls pensions

Does anyone know how many pyramid schemes have appeared and crashed in South Africa for the past twenty years?

Where were the authorities when they started?

Don’t know who’s worse, MTI, Steinhof or the regulators.

I trade Crypto markets daily and have been for 2 years without a bot. Some month’s I make 80% gains and other months I make around 15% gains. Whether anybody believes me or not is irrelevant. Facts are with the right bot software and trading strategies this is achievable. There are no guarantees in MTI (I am not an investor but did strong due diligence) so information is not 100% correct in the article. There are always 2 sides to every story, so important to look at all the facts and not follow the one eyed man due to being King in the land of the blind…

And I am not a shill who’s scared I will lose my money when this whole thing collapses.

Interestingly, how many hours on average to you actively trade on a daily basis? 🙂

Smoke and mirror stuff for the greedy blind. Check out the history of Cheri Ward and get your money out fast. Wishing you much luck !

Money web doing another article on MTI. Industry news must be really down at the moment or is MTI actually a potential threat to the old school investors. Cryto market is going to be game changing very possible to make 2% a day skelp trading.Money Web i hope you invoicing MTI for your advertising. Good or bad its drawing attention to them and and even after the last media coverage they have increased there numbers to over 150000 members.

Most of the people in MTI have took out their original investment and carry on with their proceeds. No reason to stop. Do the calculations as to how big the pool is and how many investors there are. This is small money on average, not even R20,000 per investor. I cannot think that traders cannot realize 1,5% profit on some days. There are thousands of private traders that make more money than MTI.

Why will people not run? Did it cross your mind that they made profits, took their investment out and carry on with their proceeds? The regulator warned that people may loose and recommend they leave before that happen. If you pulled your initial investment out, what do you loose? Or gain if if no regulator in the world can force you legally to stop. How much money on average will people loose? R2,900,000,000.00 divided into 150,000 members is about R19,333.00 per investor What a massive amount of money to loose! And maybe that is profit. What a huge scam, jail them.

Ok so I have R2000 worth of Bitcoin @ MTI and it’s been growing daily. You have a choice to recruit others or not. I haven’t really took time to recruit anyone. If I loose the R2000 it’s ok. I’m doing it just for fun. It’s cool to log into the back office and there is actually some good training material on Bitcoin etc. I like to read the articles on Moneyweb especially the investigations. There is been a lot of legitimate Companies that goes bust and investors loose money. Unfortunately nobody can predict the future. I had a friend that knows the stock market very well and suggested I invest in Steinhoff shares. Luckily I passed. You can loose money anywhere. There will always be risk. I also use one of the Big MLM Companies products daily. Premium products and between friends and family I earn a little cash back. I Can shop @ Uncle Raymond for my shaving gel or blades but his Cash Back is on the slim side.

Quit slandering.. Two reasons the FSCA is bad mouthing MTI 1. Is lack of sufficient knowledge about cryptocurrency.
2.FSCA and the government cannot pocket anything out of it because in South Africa Cryptocurrency is not a taxable asset and therefore they frown upon MTI… I never had issues with MTI and never had issues withdrawing my funds.And no I am not a multi millionaire yet so no I will not label it as get rich quick.. Although it helped me during the whole of the lockdown period sofar.. Thank you MTI!

End of comments.

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