MTI CEO goes AWOL, lawyers pull out

It’s not looking good for the 280 000 members planning on harvesting profits before Christmas.
Where is MTI founder and CEO Johann Steynberg? Image: Shutterstock

Where’s Johann? Panama, Brazil, South America? Speculation is running rife as to the whereabouts of bitcoin trading group Mirror Trading International (MTI) founder and CEO Johann Steynberg who apparently left the country on December 3, 2020 and hasn’t been seen since.

According to a statement released by MTI management on December 19, he remained in contact with them until about a week ago and then seemingly went off the grid and has since been uncontactable.

Several months ago, the Financial Sector Conduct Authority (FSCA) issued a warning to the public to steer clear of MTI, which promised returns of up to 10% a month using a computerised trading algorithm which was claimed to have lost only one day out of 200.

Read:
FSCA investigating Mirror Trading International (Aug 19)
Joining MTI may end in tears (Aug 20)
Get-rich-quick scheme pulls a crowd, despite regulators calling time-out (Aug 28)
Anonymous data dump ‘spills the beans’ on Mirror Trading International (Sep 21)
MTI plans countersuit after FSCA raid on offices and homes of execs (Oct 28)

To participate in the scheme, members had to buy bitcoin and ship it to a wallet apparently controlled by Steynberg.

Despite the adverse publicity, MTI’s membership seems to have grown. Last week MTI marketing executive Cheri Marks told Moneyweb the company had 280 000 members. In October, the number of bitcoin reportedly under MTI control was 17 000, which would have a current value of about R5.6 billion.

On Monday, MTI’s legal representative Ulrich Roux & Associates withdrew as attorneys of record for the group. In a letter outlining the reasons for the withdrawal, the law firm states: “It has recently come to our attention that the CEO of Mirror Trading International, Mr Johann Steynberg, is no longer in South Africa, and that the remaining members of the MTI management team have no way of contacting Steynberg. In addition to this, we have been informed that MTI members are not receiving their withdrawals, as they have in the past.”

The letter goes on to say that Ulrich Roux & Associates has been in contact with the FSCA “and will continue to provide assistance and cooperation to the FSCA pertaining to their ongoing investigation into MTI, subject to the parameters of legally privileged information.”

The law firm says it cannot provide any clarity as to the investments of MTI members, as this was not part of its mandate “and we have no knowledge pertaining to same.”

The firm was engaged by MTI in April 2020 with a mandate to assist in legal compliance in terms of the Companies Act; legal assistance in the drafting of contracts and general litigation; and legal representation relating to correspondence received and interaction with the FSCA.

Members concerned

Social media was ablaze with comments on the latest developments, and members are understandably concerned over the fate of their investments.

Brandon Topham, head of investigations and enforcement at the FSCA, says he has been inundated with queries from MTI investors from as far afield as the Netherlands, asking for clarity on the state of the investigation and the likelihood of recovering any of their investment.

“The problem that we have, and which we alerted the public to several months ago, is that once you surrender your bitcoin to someone else, it is out of your control. I only wish people had heeded our warnings to get their money out several months ago.”

Things started to go pear-shaped for MTI in October this year when the FSCA launched a search and seizure raid on the offices of MTI and the homes of some of its executives, grabbing several phones and electronic devices.

As Moneyweb reported last week, the FSCA has opened a criminal case against MTI and provided further details on its ongoing investigation into the company. “The authority [FSCA] believes that MTI and its senior management are conducting an illegal operation, misleading clients and have contravened several laws,” says the FSCA statement.

Read: FSCA opens criminal case against MTI, says investigation ‘nearly complete’

MTI maintained throughout that it did not fall under the jurisdiction of the FSCA and did not need a financial services provider licence. The FSCA said this was untrue as the bitcoin allegedly being traded by the company was in the form of derivatives, which placed it under the authority’s jurisdiction. “We have found no evidence that any crypto trading is being conducted as communicated with members of MTI,” says the FSCA statement issued last week.

MTI originally claimed to be trading forex through a Belize-based broker called FXChoice, though the FSCA investigation found that this accounted for a relatively small amount of bitcoin (1846 bitcoin, which is slightly more than 10% of the total bitcoin claimed to be under MTI’s control). Roughly 30% of the capital at FXChoice was lost over a period of just over four months this year. When clients asked for statements of account, they were provided with demo rather than actual trading accounts, issued by MTI.

MTI then says it switched to trading bitcoin rather than forex within days, and members’ statements show the daily returns kept on coming as before, a track record many believe was suspect, if not impossible.

FXChoice froze the remainder of the crypto assets linked to MTI, which then purportedly started trading through a different broker, Trade300. The only evidence of this broker existing was a website which was “under maintenance” and linked to the name Joe Steyn, a known alias of Johann Steynberg, according to the FSCA.

MTI’s astonishing success in building a network of hundreds of thousands of investors was due in no small part to its referral marketing scheme, where members who introduce new clients earned generous bonuses.

Several SA crypto exchanges have had to deal with the MTI phenomenon. The only way to invest in MTI is with bitcoin, rather than cash. Lured by the promise of returns as high as 10% a month, there are stories of retirees cashing out pension funds to invest in MTI. To acquire bitcoin, they would have to do so on one of the SA crypto exchanges, which several months ago started to quiz new customers planning on acquiring crypto for the sole purpose of investing in MTI. The exchanges told Moneyweb they tried to alert the public to the potential dangers of a scheme which looked too good to be true.

Several MTI members who wrote to Moneyweb believe the FSCA is on an unwarranted vendetta against MTI and cryptos generally.

To which Topham replies: “There’s an old saying that if something appears too good to be true, it probably is.”

MTI members brandished daily report statements showing gains of 0.2% to more than 1% a day. The FSCA believes these statements are nothing more than “shadow” or fake accounts intended to keep members happy. It has been able to track the whereabouts of some of the bitcoin wallets controlled by MTI, but not all.

The irony is that those who bought and held bitcoin in their own wallets would have made a whopping 200% in 2020, without having to hand their bitcoin over for anyone to manage on their behalf.

In recent weeks, MTI members reported difficulties in making withdrawals. MTI said this was in part due to the FSCA raid, which resulted in the broker restricting withdrawal volumes, and various technical problems.

Moneyweb was unable to reach MTI for comment at the time of publication.

Listen to Ciaran Ryan’s November interview with Brandon Topham, head of enforcement at the FSCA:

 

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Calm down, everybody, I am sure it’s all legit and the individual is simply taking a break next to the ocean. To all the trolls and shills who are about to descend on this topic: no need to panic. He’ll reappear soon and your “investments” are safe.

There is a sucker born every minute.

It was the point Incitatus was making

Even if that was the remote case, lawyers will have the info that the CEO has taken a well deserved leave and will be contactable on a specific day, don’t you think?

For laywers to pull out means they have lost confidence.

Indeed *lol*….their impressive “bot” also needs a rest over the festive season 😉 The BOT is probably ‘tired’ of working without a break…..

Trying to find the LMAO emoji…
🙂 That’s all I could get…

Comment removed

No, no, no. You only have yourself to blame. Own up. You bought panic the moment you invested in MTI. You paid for it then, it is only delivered now, and Incitatus is not the delivery boy, the FSCA is.

You need to firstly wipe the foam from your mouth, and then go and ask somebody to explain the concepts of irony and sarcasm to you. Very slowly.

“Several MTI members who wrote to Moneyweb believe the FSCA is on an unwarranted vendetta against MTI and cryptos generally.”

Hawu madoda, I remember reading the responses of these members when warned by other readers as well. They vehemently disagreed with anyone that tried to reason with them.

“A Fool and His Money Are Soon Parted” –
Proverbs 21:20 (King James Bible).

Agree 100% Zuluboy. Proponents/defenders of MTI are as bad as a religious cult….you simply CANNOT convince the brainwashed of these dangers.

5 billion – are the crypto people still so eager on the untraceable international portable anonymous “currency”? If these funds were in shares there would at least have been a custody account and audit trail. This guy has probably already bought a new name, passport and face.

btw, when offices were raided, could they not have iceboxed the crypto and seized passports?

Go after Liz Malton. She is the money scammer in KZN.

Maybe Liz M (and Cheri M & Johann S) deserve their success in scamming others out of crypto.

I stated many times on this topic “why would one relinguish control of your crypto wallet to anyone?”

But the the brainwashed MTI-supporters don’t want to listen.

Ecsponent also sounded too good to be true, Brandon.

Ja Ja we know you have a bone to pick. Focus on the job at hand. Topham aside, you still think MTI was legit?

Of course not. And I’ve never suggested anything of the sort.

Bobby, maybe you do not realise that Julius Cobbet is one of the best investigative journalists in the country and he exposed some large Ponzi-schemes himself. He exposed Abante Capital, Basileus and that listed Ponzi-scheme BK One on Moneyweb. I suggest you read his comments in that light.

Fair enough Sensei & Julius. This MTI thing has been a joke from the outset, I cannot understand how Cheri Ward and all the others were simply able to reboot BTC Global with such ease.

Thanks Sensei. You are too kind.

They were schooled by the Nigerian “Steven Twain” and then when that scam fell apart they thought “Hey we can do this ourselves” and viola that’s how this scam started. Her excuses about not been able to make payments now are from the same script as the Nigerians. Pathetic!!!

Attorneys engaged in April as per their official “goodbye” letter- absolute rubbish!. Its well known and confirmed by Ulrich Roux himself in an MTI Zoom call that they were involved back at the “beginning of the year” back in “Febraury/March”. Journalists need to ask that attorney firm for further comment and also, when he engaged with the FSCA on behalf of MTI when the FSCA apparently didnt ‘understand’ the business, what did he understand? Was he fully aware of and understood the business model and platform as claimed by his clients head of marketing Cheri Marks in the very same Zoom call.? Odd how he never corrected her.?

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caveat emptor!

Well, if not even the lawyers have an idea of the CEO’s whereabouts then the message is clear enough.

Take your “L” and move on to 2021.

I find the psychological makeup that motivates intelligent people to invest in Ponzi-schemes quite interesting. We have seen that the same people will lose money in different Ponzi-schemes. They do not seem to learn. What motivates rational people to behave irrationally and take unnecessary risks?

They don’t understand the risks in the first place. They do not realise that some risks are good and others are bad. They simply want to avoid all risks, even market risks, therefore, they take the biggest risk of all, the risk of losing everything to fraud. The fraudster sells stable profits, and guarantees compound growth.

The investor feels that this opportunity is special and unique and that he is one of a privileged few. Some operators of successful Ponzi-schemes even had waiting lists. Their clients had to wait for 3 months before they had the “privilege” to invest. This simple tactic created a frenzy under investors who even bribed brokers to put them in the front of the queue.

Peer pressure and envy also plays a large role. The well-connected elites in society are especially prone to fall for Ponzi-schemes. These individuals do not want to be out of step with the popular trend. They value their self-worth through the eyes of their contacts and friends. They feel the need to lead a new trend or experience. They feel the need to brag about their investment skills. They honestly believe that they are doing their friends a favour when they motivate them to join the scheme.

Investors choose to ignore negative information. They elect to suffer from cognitive bias. After basing their initial investment decision in emotions like hope, blind faith and trust, they cannot allow realism, facts or rationality to rob them of this once-in-a-lifetime opportunity. When the facts in the articles prove them wrong, they experience a strong motivation to attack that news source. They want to kill the messenger. They even want to destroy the regulatory authority that makes them doubt in themselves.

By attacking the media and the regulating body, they are actually not protecting the Ponzi-scheme. They are trying to protect their egos, their though-processes, their decision-making framework, their mental makeup, belief system, trust in people, faith system and hope. By sharing this opportunity with everybody who cared to listen, the investor in the Ponzi-scheme invested his entire ego into this scheme. When the scheme eventually goes bust, this investor does not only lose his money, he loses his standing in the community, his self-esteem and self-importance as well, and only shame and self-doubt remains.

As far as I am concerned, the breach of trust, the destruction of hope and faith and the impact on the psychology of the investor is by far the most damaging effect of a Ponzi-scheme.

Well done to the FSCA for warning people.

I suspect it was maybe a little too late but an improvement over the last 20 years for ponzi schemes.

The SIU needs to investigate and sort it out.

Yip, there are common character traits among these Ponzi victims. The rush to regulation will not stop them from investing in the next get-rich scheme.

It really is a shame that so many people still invested with MTI even after Johann’s links to previous scams were pointed out. There is a saying about a leopard and its spots, but I would not do a leopard the injustice by comparing it to Johann in any way shape or form.

More like something you might find in a discarded tissue.

Reminds me of the Bre-X scandal. A 30moz gold deposit which turned out to be a fraud. The project manager apparently jumped out of a helicopter into the Indonesian jungle never to be seen again (although one of his five wives still received payments long after his disappearance).
No one was ever convicted of any wrongdoing in the Canadian courts.

Any scheme where Cheri Marks has a role in it smells like fraud.

From one scam to another. Let’s hope they all sit this one in jail finally. Westville Prison have gone out of their way to prepare Liz Maltons cell.

Not “smells” like, but most certainly IS.

”Blessed are the young, for they shall inherit the national debt”
Herbert Hoover US Republican President (1874-1964)

A very good ex FX colleague of mine informed me that he participated in an MTI Zoom meeting. He mostly disagreed with their FX views and in fact, informed them it was his view that they contravened Exchange Control regulations. He was muted thereafter.

MTI must have been advised on the legality of their operations – especially with regards to various controls and laws (FAIS, etc).

I entered into discussions via email with them and was threatened that their lawyers will handle me in the future. They refused to answer any of my questions, which begs the question – who advised them – Roux and partners, and if so, who (Bank) did they in contact for specific exchange control applications/ approvals/views?

In all my years in FX Treasury, I have only met a handful of lawyers that handled complicated exchange control issues with distinction.

Maybe MTI’s lawyers could volunteer some information with regards to their views on these straight forward issues – what was their advice, now that they have withdrawn as MTI’s attorneys?

Well, at least Johann S & Cheri Marks (and a few founding members) must be doing well 😉

He will say he’s on holiday or on international business trip to gain more members….

Pity, I was looking forward to MTI’s lawyers taking on the FSCA in court….but it would’ve dragged out & more beans would’ve been spilled. The last thing Ponzi schemes need are court cases.

And then you have some MTI proponents stating media sites like Moneyweb give MTI free publicity *lol*

No really…EVERYONE (even the defending proponents) KNEW it was a Ponzi scam. For some it must’ve been a matter of “riding” it higher, before it crashes.

But I could be wrong….maybe the “bot” got “tired” of working over the festive season!! 😉

So I was wrong in the previous article, they have ruined the “investors” Christmas.

One of the bloggers in the previous article mentioned “liberland” as his bolt hole.

…no problem. Johann is traceable. All crypto is (the experts make us to believe that!)

Just call the Bitcoin Call Centre……..

(It’s ponzi schemes like these, using the valid crypto space to hide in, giving Bitcoin and crypto in general a bad name.)

If it was indeed a scam, you will only get part of your money back or all back if Bitcoin continues to move up:

1) get interpoll involved

2) hire the top IT guys to locate the usb drive with the Bitcoin wallets or ttack the Bitcoin usage (but how will you know who’s Bitcoins he is using?)

The problem is that the scammers took the ‘investors’ money in rand, but never bought actual bitcoins with their ‘investments’. The so-called investment was peed out against the wall by Cheri and the rest of the crime family, or spent on mansions and luxury cars.

As Sensei said, you’re upset at the wrong person here. You should have known better, and you should have asked yourself the following simple question: investing in something really means lending somebody your money, which you hope you will get back with some kind of return.

Now either you can lend the people your money, or they can go borrow it from the bank. They can pay the bank less than 10% interest per year, or they can pay you 10% per month, as these shysters promised. But: why on earth would they want to do the latter, if they have a legit business? What does the bank know, that you don’t, that the bank is not willing to lend them the money? What sane person would want to pay you 300% plus per year if you calculate the compound interest, when they only need to pay the bank 10%?

“The fault, dear Brutus, is not in the stars, but in ourselves.”

For Lolzk – goose/gander or heat/kitchen, take your pick. I’m not interested in this instance about what you are for or against in terms of the MTI saga, but do find it really funny (in a sad sort of way) that you have the gonads to take issue with Incitatus re his response to your first comment when you have insulted and peeled the flesh off him for being sarcastic. Clearly his initial comment was way too subtle for you to comprehend.

Short story (that applies to all of us) – be prepared to have served up to you the same dish that you deliver to others. If that’s too complex for you, then maybe go back a re-read your first comment and decide if it was in any way insulting. Warning – it will require a degree of objectivity.

The rule wit Btc is do it yourself. Buy Btc and watch it grow. Research investing first, tjo.

Shame. Die arme mense. I don’t understand how pensioners can throw their money at something like this. But then there are a lot of things I don’t understand… 🙂

It would only take 1 simple search on Google to see the guys behind it have a long history of being involved in scams.

People who did their so called ‘research’ would have seen it, and they ignored it.

Members chose to ignore the mountains of information detailing the previous shady history of those involved in MTI going back years.
They chose to ignore the many people involved in the bitcoin space who were trying to warn everyone.
They chose to disregard all the different forums, blog posts, and videos by people in the space warning that it was a scam.
Members then also tricked their friends and family to join too…why? All because they wanted to earn a commission from referring people.
Everyone chose to ignore the information, and they involved their loved ones because of greed.

Next time maybe they will listen to people who know what they are talking about, and who warn that something is not legit. If they dont learn the hard way, they dont learn.

This is called confirmation bias and is caused by overconfidence. People only consider information which reinforces their prior beliefs which limits their ability to make rational decisions.
In the example of MTI, if I believed that it was a wonderful investment opportunity but considered the view that it could be a scam, perhaps I would not put all my capital into it? This would limit my downside in the event it was a fraud. Although not the best outcome, this would not be the worst possible outcome by a long way.

End of comments.

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