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MTI: Provisional liquidators appointed

Have until March 1 to prepare a report before final liquidation order can be granted.
The first meeting of creditors will take place six to eight weeks after the final liquidation order is granted. Image: Shutterstock

The Master of the Cape High Court has appointed four provisional liquidators to track down whatever assets they can from Mirror Trading International (MTI), the bitcoin investment scheme that stopped paying out members’ requests for withdrawals in December after its CEO, Johann Steynberg, went Awol.

Read:
FBI jumps onto MTI investigation (Jan 4, 2021)
Liquidators swarm MTI (Dec 23, 2020)
MTI CEO goes AWOL, lawyers pull out (Dec 22, 2020)

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The four provisional liquidators appointed are AW van Rooyen, H Bester, Jacolien Frieda Barnard, and Deidre Basson.

MTI hoovered up an estimated 23 000 bitcoin, currently valued at about R12.5 billion, by the time it shut down in December.

It promised investors up to 10% return a month using a computerised trading system, first trading forex, then bitcoin, although the Financial Sector Conduct Authority (FSCA) could not find any evidence of trading success by the company.

The FSCA alerted the public to the dangers of investing with MTI last year and advised members to ask for their money back.

Read:
FSCA investigating Mirror Trading International (Aug 19, 2020)
Get-rich-quick scheme pulls a crowd, despite regulators calling time-out (Aug 28, 2020)

Despite this, the volume of bitcoin flowing to MTI appeared to grow as the company put out messages claiming the FSCA had overreached its powers and had no jurisdiction over it.

A leaked Zoom meeting between senior MTI executives and leaders seems to suggest no-one had any idea it was all a scam, and pinned the blame on the now missing CEO Steynberg, who is reckoned to control about 7 000 bitcoin worth about R3.8 billion. He is believed to be in Brazil. Angry MTI members posting on social media are not buying the claim that Steynberg acted alone.

The provisional liquidators will now commence the task of tracking down and taking control of the assets and liabilities of MTI.

Inquiry

There will also likely be a Section 417/418 inquiry in terms of the Companies Act to interrogate executives of the company to find out what happened in the company and, more particularly, what happened to the assets.

MTI members hoping for a quick recovery of assets may be disappointed, as the scale and complexity of the investigation will likely take several years before there is any finality. The provisional liquidators have until March 1 to submit a report detailing the assets and liabilities of MTI, at which point a final liquidation order will likely be granted.

Anyuschka Nett, senior attorney with Luitingh Attorneys, says creditors can now start to submit claims in anticipation of the final liquidation order being granted.

“There is a risk, however, depending on the scale of any shortfall in assets, that some members may have to contribute to the costs of the liquidation. We will only know this once we have the report from the provisional liquidators.”

Nett says the first meeting of creditors will take place six to eight weeks after the final liquidation order is granted. At the first meeting of creditors, claims will have to be lodged and creditors will be allowed to vote on the appointment of a final liquidator.

The provisional liquidators appointed were recommended by Recovery Action Group (RAG), a group of MTI members hoping to recover some of their investments.

Trackers

There are various international law enforcement teams looking at the MTI scam, with trackers being placed on bitcoin wallets linked to MTI and its leaders to make sure bitcoin are not transferred to third parties.

Bitcoin.com reports blockchain intelligence firm Whitestream as saying some MTI bitcoin were sent to crypto “mixers” which is a way of attempting to hide the source of the bitcoin.

Whitestream says this is a common tactic used by “other popular Ponzi schemes we already saw this year”.

Cyber security and crypto expert Vaughn Victor says “mixers” such as the Wasabi wallet are often used to hide bitcoin movements, but are only partially effective.

“It’s a more complicated process to track bitcoin going into and out of a Wasabi and other mixer wallets, but it can be done. Most people using wallets like this are doing it for criminal purposes.”

Due to the volume of claims involved, creditors are being encouraged to lodge claims even before the final liquidation order is granted, and can do so here.

RAG is posting regular news updates on MTI, Finalmente Global and other suspected bitcoin scams here.

The provisional liquidators will also communicate separately with creditors in the coming weeks.

Read: MTI claims its first commercial scalp, as Finalmente Global closes

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COMMENTS   16

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This is the only advice I can give at this late stage in the MTI story. If you want a return on capital, as well as a return OF capital, you should read Moneyweb daily.

Precisely Sensei. How many times you, I and many other commentators warned against MTI.

But then realised it doesn’t help to convince the already brainwashed ‘investors’.

So those that made money on MTI, did not ‘make’ anything. They merely sit with others’ money within the MTI casino. Minority gains huge sums & vast majority lose their smaller sums.

Don’t worry….soon in 2021…when the next scheme catches people’s attention, our jobs will be cut out again to warn others, in vain 😉

In the Bernie Madoff matter it seems that claims against the “investors” that made money off the Ponzi Scheme have been somewhat successful and if you compare MTI against Madoff his scheme was at least believable. He was an established name on Wall Street and did not offer outrageous returns (definitely not 10% a month). He gave his investors what they wanted, a nice consistent drip feed, that nice straight slope upwards. So if you were a Madoff Investor you could easily argue that you did not know versus MTI.

Authorities should start doing this and it may prevent some people doing this out of greed.

“…read MoneyWeb…,” and your comments, I would add.
I find your contributions, and those of a few other members/commentators knowledgeable, wise, insightful, integrous and the list goes on. I’m honestly grateful that you and the others take the time to contribute, because I read MoneyWeb as much, if not more so, for your comments/insights. Clearly a gentleman and a scholar.

Your comment motivates me to share what I have learned.

I learn as much from the other regular commentators. We are like a pod of dolphins. When dolphins sense a treat, they move closer together to combine and intensify the sonar signals emitted by each individual dolphin, so each one gets a clearer picture of what lies ahead. Every participant adds a bit of information so the group can form a clear picture. This is how dolphins navigate the treacherous territory when visibility is low.

@TataYourMillions.

SENSEI is not only gentleman and a scholar (and a farmer & now regulated equity trader), he also holds a 3rd Dan black belt in Karate (instructor) last time I checked. No fan belt nonsense.

If a gentleman’s approach fails to work for him, he WILL kick and strike-chop his way out of trouble.

He is a Sensei in the purest sense of the word.

(Hand him a Katana, and he may just morph into a Samurai…)

I do the same. I have even asked Ryk van Niekerk to publish some kind of weekly ‘Chronicles of Sensei’ on MW

@MichaelfromKlerksdorp Well then all that’s left to say is Sensei for President!

I agree, BUT, some of the articles around BTC does not come with the health warning from Moneyweb that it should.

I Agree Sensei.

The frightening thing though is that there will be many MTI’s in the future, the devisers of ponzi schemes will just become more creative

Yet, the promise of double digit returns is what lures greedy uninformed people, despite early warnings

The age old adage of “a fool and his money are soon parted” rings true!

I also agree with one if the posts that this was a scam involving just more than Steynburg

He paid high commissions to “agents” to spread the word..These people should be the first to repay money given and not earned

Lastly, i am convinced that not all the money , if any, went to the purchase of Bitcoin..A Bernie Madoff scam was pulled

Hello Cheri. Where are you?!

We miss your energetic videos 🙁 Please record a new one for us please…

(…I need it for my daily entertainment)

Can’t wait for any new scheme in the coming years 😉 Despite economic struggles, there are still many greedy fools that believe anything you say, and will part with their money.

The whole MTI team was involved. Should be all locked up .

Does that include their lawyers and bankers?

Genuine, I Really need to know why the word “leaders” is being used when reporting on MTI, it does not seem to be used in any other MW matter.

Maybe they are being introduced as leaders i.e. self proclaimed.

I could think of some others words to label them with but NOT leaders.

I fail to understand how Bitcoin can be a legitimate investment. It may be a superior method of transferring payments without formalities but its value seems to rise and fall on no rational basis. When will the bubble burst?

Hopefully the liquidators are equipped to also claw back from all the people at the lofty levels of the pyramid

End of comments.

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