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Profile of an MTI investor left destitute

Domestic worker ploughed her life savings of R25 000 into MTI and failed to withdraw her money before the company collapsed in December.
Image: Shutterstock

Update: A kind Moneyweb reader, who wants to remain anonymous, has offered to make a contribution to Nokuthula Makhanya to help her over her difficulties. Our thanks go out to this reader. There is indeed beauty in this world.

Of the many dozens of emails received by Moneyweb after the collapse of failed bitcoin investment scheme MTI, the story told by Nokuthula Makhanya is perhaps the most gut wrenching.

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Makhanya is a domestic worker, and a single mother of two daughters, originally from Durban, but now working in Cape Town.

This is what she wrote: “I’m a MTI member. I joined on June 21 (2020) with $1 500 of my domestic money. Now I’m sending this email as I am left with nothing. Day in, day out I really don’t know that I can make it to the next day. I (would) like to know if there is any hope that I can get my money back from MTI.”

We had to break the harsh news to her that MTI is in provisional liquidation, and that she would have to submit a claim like tens of thousands of other members hoping to get something back, and that it would likely take a long time.

Read:
Liquidators swarm MTI (Dec 23)
MTI placed in provisional liquidation and damage could be huge (Dec 29)
MTI: Provisional liquidators appointed (Jan 13)
MTI profiteers could be asked to pay back the money (Jan 19)

In June last year she was introduced to MTI by a previous employer who referred her to Ella (surname withheld at her request), who helped her sign with MTI, a bitcoin investment scheme that promised investors returns of up to 10% a month using a computerised trading system.

The Financial Sector Conduct Authority (FSCA) has found no evidence of any successful trading at MTI, computerised or otherwise.

Makhanya had accumulated savings of about R25 000 after working for five years as a domestic, and had planned a trip to Nigeria in December 2020 to visit a friend she had met in Cape Town. The expected earnings from her MTI investment would help make it an especially joyous Christmas there.

Ella explained how the MTI system worked and encouraged her to open an account in her own name, and that she could accelerate her account growth by introducing others to the scheme, which she did – a friend and her daughter. She funded her own account to the tune of $300 and a further $200 for each of her daughter and the friend, making a total ‘investment’ of $700.

Makhanya later transferred another R10 000 to MTI. She was able to access the MTI dashboard on her phone, and could see her 0.1174 bitcoin reflected in her account.

To invest in MTI, you had to purchase bitcoin and then ship that off to a ‘wallet’ controlled by MTI. Makhanya transferred her funds to Ella who purchased bitcoin on her behalf and then shipped it off to MTI. The two are no longer communicating, pointing the finger of blame at each other. Ella says she tried to assist Makhanya on several occasions to withdraw funds, but on each occasion she refused – until it was too late.

By October MTI was swirling in controversy. The FSCA had issued a statement urging investors to ask for their money back because it was operating without the required financial services provider licence.

Read:
FSCA investigating Mirror Trading International
Get-rich-quick scheme pulls a crowd, despite regulators calling time-out

Makhanya knew nothing about this. She says her only source of information was the MTI ‘dashboard’ on her phone which reflected steady growth in her account. But she wanted to get access to her funds, knowing that she had a trip to Nigeria coming up, and would need some spending money.

Makhanya was told that her funds would be released in a few days. That never happened, it seems because she did not know the process involved in withdrawing money, despite the efforts of Ella and others to help her.

Then she found out that MTI was a scam, and that its CEO Johann Steynberg had skipped the country and that the company was provisionally liquidated.

“I had to cancel my trip to Nigeria, which I was looking forward to. I really don’t know what to do now. That was all the money I had.”

Ella’s story

We reached out to Ella, who also has her own interesting story to tell. She ran a small restaurant in Cape Town which was shut down due to the Covid lockdown crisis from March 2020. Unable to pay her rent due to the lockdown, the landlord booted her from her premises, leaving her without a source of income.

Ella explains that a restaurant customer got her to invest $100 in MTI in January 2020. After the restaurant was shut down in June 2020, she happened to open her MTI account online and noticed her account had grown to $1 000.

Ella used her $1 000 to open MTI accounts in the name of her daughter and other family members. The profits she made from MTI allowed her to survive one of the most difficult periods of her life.

“There was a lot of beauty in MTI and it helped tens of thousands of people lift out of poverty,” says Ella. “People are accusing Johann of stealing the money and running away with it. There is no evidence to show this. The Johann I met was a caring, humble, generous and kind person, who only wanted the best for everyone. He was charitable, donating to many different entities, and he always paid above and beyond what was needed. I would be delighted to see him return, tell the truth and give everyone’s bitcoin back.”

Now that MTI is in provisional liquidation, Ella has launched a new business to support herself and her daughter.

What does she make of the FSCA’s finding that there was no evidence of successful trading?

“I am super shocked. On the other hand, I don’t see evidence of there being no trades. Whenever there was some negative news about MTI,. Cheri (Marks, marketing executive at MTI) would send out a voice message on Telegram saying there was nothing to worry about, and that there were forces out to shut down MTI.

It’s clear that Makhanya and Ella have entirely different views of their experiences with MTI. There are thousands more like them with stories just like theirs.


Listen: FSCA’s Brandon Topham and VALR’s Farzam Ehsani on the speed with which bitcoin and forex scams have ripped through SA and the MTI scandal’s impact on SA’s crypto market

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COMMENTS   19

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Many financially uneducated people invested in MTI. Not because they are greedy but because they thought it was a sound way to invest. I feel sorry for them.

No. Multiplication schemes are illegal with reason. That percentage of gains and (effectively) no loss is not only unlikely it’s ridiculous. That’s not a sound way to invest

He didn’t say it was a sound way to invest, he said the uneducated thought it was a sound way to invest. How would a domestic worker, presumably with almost no formal education or schooling, know what a realistic or too-good-to-be-true ROI is? I agree with Mr Stoffel. When people can’t reasonably be expected to know better, you should feel sorry for them for having been exploited by fraudsters like Steynberg.

I’m definitely behind the times

Time to buy our domestic worker a computer

@Seve Roux – No need the ANC is about to deliver them the land from 94′

I don’t see how the domestic is left “destitute” if the plan was to spend her life savings on a holiday??

Had she gone on the holiday and spent her life savings how would this have ensured her future and continued “prosperity”??

Shame. This logic is often seen in anc policy.

This article smacks of one sided emotional journalism. How does the writer know Ella was “booted” from her premises rather than asked to vacate due to non payment. What do you expect the landlord to do? Besides the investment was to be used for holidays and not to pay for necessities.

Not only that, apparently Ella’s investment grew by 1000% in 6 months….

My understanding of MTI is that they promised returns of 10-15% month on month. There is no way her $100 turned in to $1000 in 6 months.

@wolvyreen

If you drop 1% per day average into a compounding daily calculation $100 becomes ~$600 by month 6,breaching $1000 by month 8
So the duration could be fudged,or a little recruitment added to her figures would make up any difference too

Step it up Moneyweb. 3 Minutes wasted of my morning. Don’t see the point of this article.

I may have even felt sorry for her, had she been saving for her daughters education and then been duped, but the fact she was prepared to blow her life’s savings on a holiday to Nigeria to visit a friend gets no sympathy from me.

Someone is sipping pinocoladas somewhere on some beach resort …

Not sure if I would be able to enjoy those pina coladas if I were in that someone’s shoes… probably not.

The sceptic in me wonders if the domestic worker didn’t maybe get off lighter than she may otherwise have. A holiday in Nigeria at the invitation of a friend you met in Cape Town that took a lifetime to save for?

“Ella explains that a restaurant customer got her to invest $100 in MTI in January 2020. After the restaurant was shut down in June 2020, she happened to open her MTI account online and noticed her account had grown to $1 000.”

I’m calling rubbish on this article or Ella’s story!!

Emotional journalism at is finest people!

I question the validity of this entire article now.

Apparently Ella invested $100 in January 2020 and it grew to $1000 by June???

I thought that MTI promised returns of between 10-15% every month. There is no way that her $100 grew to $1000 in 6 months…

MONTH 1: $100+15%=$115
MONTH 2: $115+15%=$132.25
MONTH 3: $132.25+15%=$152.09
MONTH 4: $152.09+15%=$174.90
MONTH 5: $174.90+15%=$231.31
MONTH 6: $231.31+15%=$266

For a website that deals with money, they don’t have a calculator or they don’t verify the facts.

Ella is ficticous or she has a liar!!

Ficticous???

Sorry wolvy,your calculations are only accurate in the real world unfortunately
MTI and the Ponzis in general offer “Daily Compounding” as their miracle sauce,she could well hit ~$600 in 6 months from daily compounding at 1%
I assume there may have been a referral or 3 in to bump that,or she mis-stated and it was 8months which hits $1000

Thats kind of the point,these Ponzi scams are ridiculous gains promised

In previous blogs on MTI I suggested that we get a bit more information on the “victims” to help us understand their reasoning for “investing” in such a Ponzi scheme.

As noted before some reasons given, stupidity, greed, lack of knowledge, trust and the worst is that the investors know what they are getting into but figure that can get in and early leaving later guys with the problem.

These two fall under lack of knowledge and Ella thought she could get in and out quickly. How about some expert opinion on why people do this.

The worrying thing is that all South Africans that ” invested ” there are eligible to vote here .

End of comments.

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